1 Contents

Address by the Chairman of the Board of Directors 4

Address by General Director 6

Mosenergo Today 8 Company Profile 8 Operational Highlights 10 Financial Highlights 10 Mosenergo's Position in the Power Generation Industry 10 Shareholders Capital 11 Competitive Advantages 12 Major Events of 2009 12

Mosenergo Operations 14 Power Generation 14 Sales 16 Fuel Supply 18 Investment Repair and Maintenance Activities 19 Investment Activities 19 Repairs and Maintenance 20 Efficiency and Safety of Production 22 Power Saving Programme 22 SAP Implementation 23

Analysis of Financial Performance 24

Social Responsibility 26 Human Resources Management and Social Programmes 26 Headcount and Structure of Personnel 26 Staff Motivation System 28 Staff Education and Development 28 Social Programmes 28 Occupational Health and Safety 28 Commitment to Environmental Protection 30 Establishing of the Advanced Health Safety Environmental System 31

Corporate Governance 32 Underlying Principles 32 General Meeting of Shareholders 32 Board of Directors and its Committees 33 Audit Commission 34 Executive Board 34 Remuneration 34 Changes in the Company's Structure 35

Additional Information 36 Mosenergo's History 36 The Structure of the Power Industry in 37 Mosenergo's Positioning in the Generating Power Industry 37 Risks 38 Securities 40 Information about the Members of the Board of Directors, BoD's Committees and the Executive Board 42 Compliance with the Corporate Governance Code of the Federal Financial Markets Service 49 Information on Interest Party Transactions 56 Informational Policy 61 Financial Reports in accordance with the Russian Accounting Standards 63 Glossary 107 Contact Details 108 Address by the Chairman of the Board of Directors

Dear Shareholders,

OJSC Mosenergo is the largest power generating company in Russia and a major producer of thermal energy in the world. steam-and-gas combined cycle units with an efficiency factor over 50% and to replace worn-out equipment. Such arrangements result in a major upgrade of power units technical characteristics, enhanced fuel consumption efficiency and improvement of the environmental indicators for power plants. Starting from 2007 Mosenergo commissioned three new steam gas power units with total capacity of 1,325 MW. After commissioning of the Combined Cycle Gas Turbine-420 on TPP-26 scheduled for 4Q 2010, Mosenergo will become the first Russian power company to have fully In order to increase performance efficiency in 2009, the Company introduced measures to reduce operational costs, ensure financial stability completed the implementation of the initial stage of the investment programme. and update human recourses management system. Stable operations combined with the investment programme implementation will further support Mosenergo's leading position among Russian generating companies. To summarise Mosenergo's activities in 2009, I should note that the last year was not an easy time for the Russian power generating sector. It was affected by new conditions of electric power generation sector operations in this country as well as global economy situation. The start In 2009 Mosenergo implemented a number of projects to increase efficiency. Reconstruction and commissioning of new equipment, of the year was marked by a considerable drop in energy consumption, which consequentially reflected on generation volumes, as well as maintenance activities, optimisation of load operations allowed to reach a substantial decrease in fuel use, cut down auxiliary power financial results of all energy companies. requirements and achieve a notable economic effect.

However, Mosenergo successfully reached all objectives set for 2009. The key priority of the Company's operations is reliable supply of One of the Company's priorities is protection of the environment. Mosenergo completed the implementation of the Environmental Management electricity and heat to the region: last year, Mosenergo's power plants generated 61.7 bn kWh of electricity - the highest volume System, which complies with the international ISO 14001:2004 standard. Within the Environmental Policy implementation programme among all Russian thermal generating companies. Heat output reached 65.4 mn Gcal, which is 4.7% higher than 2008 results. New generating Mosenergo reconstructed all of the power boilers. Mosenergo power plants follow a system of environmental control and carry out annual capacities made a substantial contribution into overall OJSC Mosenergo operational result. The volume of electricity generated by new power activities to reduce emissions and improve waste water treatment. units in 2009 grew more than two times up to 7.3 bn kWh. I am confident that active cooperation between the Company's Board of Directors, the Management and shareholders will ensure successful The key objective for the Company is to implement the most innovative technology in the electric power sector, namely to commission highly-efficient achievement of current objectives and realisation of our development plans in the future.

Member of Gazprom Executive Board, Chairman of the Board of Directors of OJSC Mosenergo Kirill Seleznev

4 5 functions. Last year, the Company outsourced cleaning, catering, employee medical and social services, as well as a part of telecommunication Address by General Director services. The Management estimates annual savings of fixed costs at 250 mn roubles.

The Company carried out a full-scale operation to reorganise the non-core assets management system, namely, the liquidation of several non- core assets or the reduction of the service costs on such assets; monitoring and property control tools were implemented followed by an increase of property lease revenue.

The Company used the cash flow from the sale of a cluster of buildings on the Raushskaya Embankment in Moscow, as well as other properties, to finance our new construction programme, technical upgrade and reconstruction. Investment Projects

The key investment project for the Company in 2009 was the construction of combined cycle gas turbine (CCGT) No.8 at TPP-26. Last year, the Company successfully changed its approach to project management due to the creation of 'TEK Mosenergo', which was based on the liquidated branches of the Company (Mosenergoproekt, Mosenergospetsremont and the Pilot Plant for Automation and Instruments). We introduced fundamental changes to the agreement with the EPC-contractor; these changes allow us to define obligations of the parties and outline clear terms of the unit commissioning. The construction is due to be completed by October 31, 2010.

The Company carried out several measures to enhance the safety of main and accessory equipment within the technical upgrade and reconstruction programme.

Increase of Financial Stability

Dear Shareholders, Our efforts to achieve financial stability allowed the Company to successfully overcome the shortage of liquidity in mid-2009. According to 2009 results, cash inflow from operations exceeded the level registered in 2008. In 2009, the Company successfully executed an offer on a bond loan In 2009, Mosenergo successfully achieved its key objective to ensure uninterrupted power supply to the region and to guarantee stable output of of 4.6 bn roubles, as well as carrying out an initial bond issue of 2 bn roubles and a 5-year corporate bond issue of 5 bn roubles. The Company electricity and heat. significantly increased the long-term exposure of the credit portfolio (up to 90% of the portfolio), as well as decreased the total debt volume by 2.8 bn roubles. Company's EBITDA increased by 120% year-on-year and amounted to 17.8 bn roubles in accordance with 2009 results; net profit totalled 4.5 bn roubles, which was 3.2 times higher than 2008 results. Mosenergo considerably changed its credit portfolio structure by replacing secured strict covenant loans with unsecured loans.

Successful operating activities in 2009 had a positive effect on Mosenergo's capitalisation growth. The Company's market capitalisation grew by Objectives for 2010 91.8 bn roubles (330%) and reached 131.3 bn roubles, which exceeds capitalisation growth rates of other Russian electricity and heat generating companies. The Company's Management considers the following objectives as top priority for 2010: 1. Capital employed efficiency growth. In particular, the efforts will be focused on: The Company successfully achieved all of the 2009 objectives. • The implementation of high-return investment projects (the completion of Unit 8 of CCGTe-420, the preparation and drafting of three new units of CCGT-420, as well as other projects). Cost and Business Process Optimisation • Efficient use of existing capacities (primarily, ensuring availability of high-performing equipment). • Sale of non-core assets. • Detection of low capital efficiency assets and undertaking measures to either increase efficiency or to sell such assets. In 2009 Mosenergo successfully carried out integrated measures to cut down administrative and business expenditure, as well as overall fixed 2. Increasing safety of the Company's operations and achieving new standards in occupational health and safety. Within the framework of this costs. The implemented initiatives had a positive effect on our financial indicators: the rate of revenue growth (+18%) considerably exceeded the objective, the Company is planning to: growth of fixed costs (+4%). The implementation of new large-scale projects aimed at increasing production and labour efficiency resulted in an • Design and implement a transparent, clear-cut and structured repair management process on the basis of the SAP TORO module. economic effect, which amounted to over 850 mn roubles in the reporting year. • Total Execution of the investment programme budget, classified as «safety». • Implement measures aimed at reducing the breakdown rate, including the implementation of fully tested programmes to replace and repair In March 2009, the Company launched the 'Lean Production' Project aimed at enhancing the safety and efficiency of power plant operations, worn-out equipment and to increase efficiency of staff training and testing. reducing the number of accidents and equipment malfunctions, as well as improving technical and economic indicators. After the successful 3. To continue cost optimisation. In 2010 the Company is planning to: implementation of the pilot project, Mosenergo is planning to roll out the 'Lean Production' Project at all of the Company's power plants by • Implement the initiatives developed by cost-centres aimed at reducing operation expenses by 200 mn roubles. 2012. According to preliminary estimates, the annual economic effect of the implemented projects on each power plant could reach 150-200 mn • Complete the 'Head Office Lean' Project by reducing general management expenses by 300 mn roubles per year. roubles, and will result in a 30% growth of production. • Roll out the 'Lean Production' Project on eight of Mosenergo's power plants. This project will allow the Company to convert 73% of its total capacity to the new highly-effective operational management system by the end of 2010. The SAP system was rolled out in 2009 within the framework of the 3-year 'Changing of Management Standards and CIS (Corporate Information 4. Increase sales volumes of heat generated in the combined regime by: System) Implementation' Programme, which the Company is planning to implement during 2009 - 2011. In 2009 the Company adopted SAP • Reaching new sales areas in the towns neighbouring Moscow. decisions in order to manage processes of purchase, inventory, sales, budgeting and reporting, taxation and accounting, investments, liquidity • Implementing a personal approach practice between account managers and key clients, creating the client-management structure for and credit financing. The consolidated informational platform improved operational efficiency and accuracy of managerial information, as well as subscribers, as well as providing additional services to clients. leading to an improvement of the Company's resource management and the reduction of costs not related to production. • Continuing to work in line with the Task Group on the drafting of the Heat Supply Law.

The Company managed to achieve considerable advancement in the creation and implementation of a staff performance appraisal and motivation system: the new remuneration system ensures a closer correlation between staff salaries and their performance results. General Director Notable fixed costs optimization was obtained through management efforts, but not limited to the centralisation and outsourcing of supporting OJSC Mosenergo Vitaliy Yakovlev

6 7 1 «Mosenergo» TPP-21 1 800 MW Today 4 958 Gcal/h

Moscow TPP-23 1 420 MW 4 530 Gcal/h Klin

Lotoshino Section p. Section p. OJSC 'Mosenergo' Today 8. Sergiev Posad OJSC 'Mosenergo' Today 8. ТPP-27 Mosenergo Operations 14. GRES-3 Mosenergo Operations 14. 1 060 MW Analysis of Financial Performance 24. 604 MW Analysis of Financial Performance 24. 1 876 Gcal/h Social Responsibility 26. 480 Gcal/h Social Responsibility 26. 32. Shakhovskaya 32. Corporate Governance Pushkino Corporate Governance Additional Information 36. TPP-16 Additional Information 36. Istra Shchelkovo 360 MW 1 484 Gcal/h Krasnogorsk TPP-22 Orekhovo-Zuevo Ruza 1 310 MW Pavlovski Posad 3 606 Gcal/h Ramesnkoe Vidnoe Narofominsk Egorievsk

Voskresensk TPP-17 Chekhov 192 MW TPP-20 712 Gcal/h 730 MW Moscow region 2 400 Gcal/h Lukhvitsy

Stupino TPP-25 TPP-12 1 370 MW 408 MW 4 088 Gcal/h 2 043 Gcal/h Company Profile Zaraisk

Mosenergo's mission is to provide consumers with electricity and heat generated using advanced resource-conserving TPP-9 TPP-8 technologies on equipment which complies with the highest 210 MW 605 MW Teplosbyt environmental standards, as well as ensuring fair returns for 560 Gcal/h 2 192 Gcal/h the Company's shareholders.

Mosenergo network consists of 15 power plants with a total Head electric capacity of 11.9 thousand MW and a heat capacity of Office TPP-26 TPP-11 34.9 thousand Gcal/hour. HPS-1 1 410 MW 330 MW 95 MW 4 006 Gcal/h 1 011 Gcal/h 951 Gcal/h 8 9 1 Hereinafter - the Company or Mosenergo Operational Highlights Mosenergo's Shareholders Capital Structure3, % Mosenergo's charter capital amounts to 39,749,359,700 roubles and is divided between 39,749,359,700 common 2008 2009 Изм. registered uncertified shares with a face value of 1 (one) Electricity Output, mn, kWh 64,274 61,747 -3.9% 15.84 rouble each. Electricity Sales mn, kWh 65,044 63,387 -2.5% Heat Output, thous., Gcal 62,440 65,406 +4.8% 26.45 Securities Heat Rate, grf/kWh 255.1 244.7 -4.1% 3.86 0.35 Mosenergo's ordinary shares are listed on Russian MICEX (in quotation list A1) and RTS (in quotation list A2) stock Financial Highlights2, mn. roubles exchanges.

2008 2009 Change Tickers: Revenue 94,779 112,227 +18.4% • MICEX: MSNG Section p. Section p. Net cost (89,981) (105,138) +16.8% • RTS T+0: MSNGG OJSC 'Mosenergo' Today 8. • RTS Classica: MSNG OJSC 'Mosenergo' Today 8. Net profit 4,798 7,090 +47.8% 53.50 Mosenergo Operations 14. • Bloomberg: MSNG RU Mosenergo Operations 14. Sales profit 4,688 7,015 +49.6% Analysis of Financial Performance 24. • Reuters: MSNG.RTS Analysis of Financial Performance 24. Social Responsibility 26. Net Profit 1,372 4,509 +228.6% Social Responsibility 26.

Corporate Governance 32. 01.01.2009 31.12.2009 Change Gazprom Legal Entities Mosenergo Depository Receipts Programmes: Corporate Governance 32. Energoholding and Nominees Treasury Stocks Additional Information 36. Non-Current Assets 155,552 149,601 -3.8% • 144А Additional Information 36. Current Assets 47,097 57,497 +22.1% Moscow • Reg S Individuals • Level 1 Long-Term Liabilities 17,701 21,846 +23.4% Government Current Liabilities 21,307 17,075 -19.9% Mosenergo 2009 Market Capitalisation 2009 MICEX Index Dynamics Dynamics, bn roubles Mosenergo's Position in the Power Generation Industry

Electricity Generation in Russia, 2009, % Electricity Generation in the Moscow Region, 2009, %

17.9 16.8 19.8

4.7 65.9 6.3 3.0 2.0 January April June September December January April June September December

3.9 Mosenergo TGK-1 TGK-9 TGK-4 5.3 54.2 Legend to Mosenergo 2009 Market Capitalisation Dynamics

Date Event Change of share price 1 February 17 Mosenergo's Management announces its intentions to not pay dividends for 2008. -4.3% 2 March 25 Release of the 2008 financial report in accordance with RAS. +0.9% Thermal Hydro Mosenergo TPP-5 Other 3 April 10 The System Operator reports that the economic slowdown had a minor effect on electricity +47.4%4 consumption in Moscow and Saint Petersburg. V.V. Putin's address on the implementation Mosenergo ZaHEPS Net Power Flow Nuclear Retail Market Plants TPP-4 of investment programmes. 4 May 25 Release of the 2008 financial report in accordance with IFRS. Mosenergo's Management +8.3% meeting with analysts. 5 June 10 Article in the Kommersant newspaper regarding possible changes in the Mosenergo -1.7% investment programme and transfer to Mosenergo a part of OGKs investment projects. Mosenergo's power plants supply around 66% of electricity and heat consumed in the Moscow region. 6 June 20 Market information on a possible huge non-payments amounts to the power industry. -11.9%

10 11 2 RAS 3 As of 30/12/2009 4 For the following two trading days Date Event Change of March Mosenergo power plant for market analysts. share price 7 July 17 Release of 1Q2009 financial report in accordance with IFRS +4.2% March 4 The Company approved the minutes of the Annual September 8 August 12 Release of 1H2009 financial report in accordance with RAS. +9.4% General Meeting of Mosenergo Shareholders, as well as the list of candidates for the Company's Board of Directors. September 25. In line with the Mosenergo investment 9 August 28 Analysts power plant site visit, organized by Gazprom Energoholding. +1.3% programme, the Company continues the construction of October 15 Gazprom Management announces that discrepancies between MOEK and Mosenergo's 10 -2.4% March 10 Launch of the 'Lean Production' Project. power unit number 8, CCGT-420: the Company delivered investment programmes lead to construction of redundant heat capacities. the primary equipment; installed gas and steam turbines; 11 November 25 Release of 9M2009 financial report in accordance with RAS. -4.2% March 25 Release of Mosenergo 2008 RAS reports. assembled all modules of the recovery boiler, completed 12 December 3 Standard&Poors includes Mosenergo among top three companies in the power industry +2.8% construction of the fan cooling tower, as well as finishing the for its informational transparency. April assembly of gas and steam turbines. 13 December 21 Release of 9M2009 financial report in accordance with IFRS. Mosenergo Management +1.9% holds a telephone conference with analysts and clarifies reasons for the Company's net April 3 Mosenergo wins the 'Disclosure of Information' Award October Section p. loss. in the 5th annual contest for annual reports of power industry Section p. OJSC 'Mosenergo' Today 8. companies. The contest was organised by the EnergoRynok October 8. Mosenergo Management meets analysts of the leading OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. Mosenergo Bonds Listed on MICEX Stock Exchange magazine. investment companies and banks to discuss the Company's Mosenergo Operations 14. Analysis of Financial Performance 24. 1H09 IFRS reports. Analysis of Financial Performance 24. Social Responsibility 26. Series Identification Number Date of Issue Bond Description Face Value Number of Maturity Term May Social Responsibility 26. Corporate Governance 32. Registration (roubles) Bonds October 28. the Company launches a new generating capacity, Corporate Governance 32. Additional Information 36. May 25 Release of Mosenergo audited consolidated 2008 IFRS GTR-TPP of Mosenergo in the town of Pavlovskiy Posad Additional Information 36. BО-01 4В02-01-65116-D 01.12.2008 1,000 1,000,000 1 year report. (Moscow region). stock bearer bonds with BО-02 4В02-02-65116-D 01.12.2008mandatory centralised 1,000 2,000,000 1 year May 26 Mosenergo Management meets analysts of the leading custody November BО-03 4В02-03-65116-D 01.12.2008 1,000 2,000,000 1 year investment companies and banks to discuss the Company's 2008 IFRS reports and the priorities for 2009. November 27. Mosenergo wins the Power Industry Award in the 12th Annual Federal Competition for Annual Reports June and Web Sites. The competition was co-organised by the Securities Market magazine and the MICEX stock exchange June 30 the Company held the Annual General Meeting of with the support of IMADESIGN branding company. 1,030 Commissioning of Mosenergo's New Competitive Advantages Mosenergo Shareholders. Capacity, MW December The major competitive advantages of the Company are: July • Strong position on the stable market of electricity and heat December 3. According to the research released by Stan- consumption. July 9. Within the framework of the construction project for power dard&Poors, the international rating agency, Mosenergo is • High technical and economic characteristics of the unit number 8 of CCGT-420 at TPP-26, Mosenergo delivered the among the top three companies in the power industry for its existing equipment (compared to the Company's primary equipment: steam and gas turbines, the recovery boiler, informational transparency. competitors in gas generation). generators and transformers, as well as booster compressors. • Focus on operational mobility. December 4. Mosenergo placed series 03 five year maturity rouble July 277. bonds amounting to 5 bn roubles on MICEX stock exchange. • K.G. Seleznev, member of Gazprom's Executive Board, CEO of Mezhregiongaz was elected as the Chairman of Mosenergo's December 16. Mosenergo repaid its liabilities to the European BoD. Bank of Reconstruction and Development before maturity. This Major Events of 2009 • P.P. Biryukov, First Deputy Moscow Mayor in the Moscow obligation was incurred under the loan agreement with a limit Government, Head of the Moscow Municipal Services Complex, of 7.2 bn roubles, which was signed by the parties in December February TPP-6 (association with TPP-3), TPP-28 (association with was elected as the Deputy Chairman of the BoD. 2005. TPP-21), the Enterprise for Production and Technological Starting from February 11, the Registry of Shareholders is Integration, the Pilot Plant for Automation and Instruments August December 21. Mosenergo held a telephone conference with maintained by the Specialised Registrar, the Holder of the (PPAI), the Special Design and Technological Bureau for High- investment analysts to discuss the results of the Company's Register of Shareholders in the Gas Industry, ltd. (SR-HRSGI, Voltage and Cryogenic Technology, Mosenergospetsremont August 26 In August 2009, the Company held auctions to sell real consolidated IFRS reports for the first nine months of 2009. ltd.). The new Registrar was approved by Mosenergo's Board of (MESR), Moscow Design Office for the Development of Power estate on the Raushskaya Embankment and Sadovnicheskaya Directors on November 10, 2008. The transfer of the Registry to Facilities (MEF), the Medical and Sanitation Service. MESR, Street, as well as the property of Agroholding Shaturskiy, as part December 28. Mosenergo completed the re-certification audit SR-HRSGI, ltd. was carried out in line with the Gazprom Group's MEF and PPAI constituted a base for TEK Mosenergo and the of the programme aimed at the disposal of Mosenergo's non- of the Company's Environmental Management System, which corporate governance. EPC contractor. core assets, structural optimisation and the improvement of confirmed the System's compliance with the international ISO efficiency of the Company's core operations. 14001-2004 standard. February 165 • The Company determined the new membership of the Executive • The Company decided to liquidate the following branches: Board.6 August 28 Gazprom Power Holding organises a site visit to a

12 13 5 The Meeting of Mosenergo BoD. 7 The Meeting of Mosenergo's BoD. 6 For further information please refer to paragraph 5.5, 'The Management'. Heat Supply. thous. Gcal (continuation) Mosenergo Operations Power Plant 2009 2008 Change TPP-9 1.308 1.177 +11.1% TPP-11 2,368 2,179 +8.7% TPP-12 3,064 3,033 +1.0% TPP-16 3,628 3,490 +4.0% Power Generation of electricity. The same figure for 2008 amounted to 64.2 bn kWh. The drop in generation for the reporting period occurred TPP-17 546 528 +3.4% In 2009, the Company operated without significant primarily due to a decrease of electricity consumption in TPP-20 4,696 4,501 +4.3% malfunctions and ensured steady power plants operations, the Russian Federation. The 2009 consumption in the UES TPP-21 10,653 10,061 +5.9% as well as reliable supply of heat and electricity to consumers Centre, as compared to 2008, dropped by 5.5% (according Section p. in Moscow and the Moscow region. to SO UES); consumption in the Moscow Region (Moscow TPP-22 9,089 8,818 +3.1% Section p. OJSC 'Mosenergo' Today 8. OJSC 'Mosenergo' Today 8. City and the Moscow Region) declined by 3.9% over 2008 TPP-23 8,278 8,329 -0.6% Mosenergo Operations 14. In 2009, the Company's power plants generated 61.7 bn kWh (according to the SO UES branch of Moscow LDO). Mosenergo Operations 14. Analysis of Financial Performance 24. TPP-25 6,592 6,262 +5.3% Analysis of Financial Performance 24. Social Responsibility 26. TPP-26 7,929 7,594 +4.4% Social Responsibility 26. Corporate Governance 32. Electricity Generation, mn kWh Corporate Governance 32. TPP-27 2,759 2,311 +19.4% Additional Information 36. Additional Information 36. Power Plant 2009 2008 Change TOTAL: 65,406 62,440 +4.8% HPS-1 390 383 +1.7% TPP-3 176 178 -1.2% TPP-8 2,457 2,922 -15.9% Heat generation is influenced by average temperatures in the to 88% of the annual heat supply. In 2009 compared to 2008, TPP-9 1,243 1,312 -5.2% heating period and, consequentially, by the duration of the the average annual temperature dropped by 0.6 degrees per heating season. Heat supply in the heating period amounted annum, including a 2.3-degree drop in the heating period. TPP-11 1,673 1,924 -13.0% TPP-12 2,571 2,737 -6.1% TPP-16 2,329 2,430 -4.2% Temperatures TPP-17 579 655 -11.6% 2008 2009 Change TPP-20 3,899 4,232 -7.9% Average Annual Temperatures, °C +7.4 +6.8 -0.6 TPP-21 9,627 9,100 +5.8% Average Temperatures in the Heating Period, °C +2.0 -0.3 -2.3 TPP-22 8,014 8,727 -8.2% TPP-23 7,704 8,438 -8.7% TPP-25 7,516 9,046 -16.9% Mosenergo's total capacity at the end of 2009 reached relabeling: reconstruction of turbine set No.9 at TPP-12; TPP-26 7,598 8,421 -9.8% 11,924.28 MW, an increase of 20 MW compared to the • relabeling of turbine set PT-80/100-130/13 No.1 at TPP-27 5,973 3,770 +58.4% beginning of the year. The changes took place due to: TPP-26 with an increase of electric capacity (+10 TOTAL: 61,747 64,274 -3.9% • relabeling of turbine set PT-80/100-130/13 No.9 at MW), starting from March 23, 2009. Reasons for TPP-12 with an increase of electric capacity (+10 relabeling: reconstruction of turbine set No.1 at TPP-26; MW), starting from March 23, 2009. Reasons for At the same time, the volume of electricity generated by new new equipment. The Company is enforcing actions aimed at capacities (power units CCGT-450 at TPP-21 and TPP-27) solving problems and achieving optimal load regime. grew more than two-fold to 7.3 bn kWh in 2009. The share Total Capacity Load Factor, % of new generating capacities in the Company's aggregate In 2009, heat supply from Mosenergo TPP collectors reached generation reached 11.8% by year end. 65.4 mn Gcal, an increase of 4.8% over 2008 results. This Capacity Factor, Electricity Capacity Factor, Heat growth was primarily caused by lower than usual outdoor air 2008 2009 Change 2008 2009 Change Additionally, new CCGT units were underloaded in 2009 due temperatures. 64.8 59.1 -5.7 40 39.6 -0.4 to operations aimed at commissioning and debugging of the

Heat Supply, thous. Gcal The utilisation rate of the average annual total electric The utilisation rate of the average annual total heat capacity capacity for Mosenergo power plant turbines was 5.7% lower of turbine delivery under the system amounted to 39.6%, a Power Plant 2009 2008 Change in 2009 compared to 2008, and amounted to 59.1%. Major decrease of 0.4% over 2008 results. The drop was caused by HPS-1 1,818 1,654 +9.9% factors which influenced the drop: a decrease in electricity the mid-2008 launch of the new equipment and the relabeling consumption (reduction of average electric loads and a large of existing equipment in 2009, which accounted for the TPP-3 516 517 –0.2% scale shutdown and transfer of equipment into reserve), and average annual growth of the total heat capacity of turbine TPP-8 2,160 1,986 +8.7% an average annual growth of total capacity. delivery (+439.9 Gcal/h).

14 15 Sales Sales of Electricity, thous. MWh Monthly Analysis of the Net Heat Supply, thous. Gcal

47,572 In 2009, the volume of electricity sales decreased by 1,655 thousand MWh or 2.5%, as compared to the previous reporting period. This happened due to a decline in electricity 38,732 consumption in the Russian Federation. In 2009, capacity sales volumes reached 11,769 MW, which exceeds 2008 figures by 923 MW or 8.5%.

24,655 The increase of electricity and capacity sales volume on the free sector, as compared to 2008, was mainly due to: 17,472 • The growth of the wholesale market liberalisation (from Section p. 15% in 1H08 to 30% in 1H09 and from 25% in 2H08 to 50% Section p. OJSC 'Mosenergo' Today 8. in 2H09). At the same time, the capacity market was only January February March April May June July August September October November December OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. launched on July 1, 2008 (it was not liberalised in 1H08). Mosenergo Operations 14. Analysis of Financial Performance 24. Analysis of Financial Performance 24. Social Responsibility 26. • The launch of unit 4 at TPP-27 on January 1, 2009, as well Changes in the Client Base Social Responsibility 26. Corporate Governance 32. as an increase in capacity sales volumes for unit 3 at TPP- Corporate Governance 32. Additional Information 36. 27 and unit 11 at TPP-21 (capacity sales for units 3 and 11 Clients as of January 1, 2009 as of January 1, 2010 Change Additional Information 36. only took place in the second half of 2008). Load Load • Equipment modernisation (the gain in 2009 at TPP-12 and Sales of Capacity, MW Contracts Supply Gcal/ hour Contracts Supply Load Contracts Supply Gcal/ hour Points Points Points TPP-26 amounted to 20 MW); 9,263 Total 7,849 14,669 32,599 7,890 14,835 32,886 +41 +166 +287 In 2009, heat supply exceeded the figures registered in including: 12 6,832 16,113 12 6,957 16,343 0 +125 +230 2008. This happened due to lower temperatures, as well 6,827 ‘MOEK’, PLC as an expansion of the client base. Compared to 2008, the Industrial Enter- 652 652 3,645 644 644 3,589 -8 -8 -56 number of supply points grew by 166 units, and the connected 4,943 prises (retail) load rose by 287 Gcal/hour. In 2009, the Company managed Public Sector Or- 1,576 1,576 3,624 1,575 1,575 3,612 -1 -1 -12 to overcome the trend of a client base decrease: the client ganisations (retail) base shrank by 214 supply points in 2008. The fact that the Other Legal Entities 4,525 4,525 7,979 4,554 4,554 7,971 +29 +29 -8 appellate court legitimised the FAS decision proved to be a 1,582 (retail) significant influence in this process. Housing (utili- 1,084 1,084 1,238 1,105 1,105 1,371 +21 +21 +133 ties management) Organisations, Homeowners As- Regulated Sector Free Sector sociations, Housing and Construction Cooperatives and Others (retail)

OJSC Mosenegro has heat capacity reserves on most of its , Mytishchi, Vidnoe, if such expansion is power plants. The Company faces a risk of a drop in heat economically feasible; sales as a result of an increase of temperatures during heating 3. reorganisation of Mosenergo's interaction with both existing Sales Volumes and Sales Revenue from Heat in 2008 and 2009 seasons (apart from 2009 and 2010), power saving policy, and and potential heat consumers; setting-up of a client service, the minimisation of construction within Moscow city limits. as well as a service for key clients. 2008 2009 Change In order to mitigate these factors, OJSC Mosenergo is This project was launched at the end of 2009. We are implementing a project aimed at increasing efficiency of the expecting the transfer of load to the summer period as early Indicator thous. Gcal mn roubles thous. Gcal mn roubles thous. Gcal mn roubles heat business. This project outlines several priority directions as the summer of 2010. The increase of heat supply to the Net Supply of Own Consumption 58,601 35,927 60,901 45,286 +3.9% +26% for the Company's operations which will lead to a short-term town of Mytishchi is scheduled for mid-2010; the start of rise in heat sales: the heat pipeline construction in the town in Dolgoprudny is Offset of Losses 4,450 1,613 4,929 2,223 +10.8% +37.8% 1. transfer of some load from MOEK's regional thermal plants planned for the end of 2010. A successful reform of the Sales to Mosenergo's power plants as part of a city-wide power Department, as well as organisational changes in regard to Total Heat Supply 63,051 37,540 65,830 47,508 +4.4% +26.6% saving programme; heat sales, will be completed in 2010. The effect from these 2. expansion of Mosenergo to satellite towns, such as operations is expected in 2011. 16 17 Fuel Supply Fuel Consumption, Tonnes of Reference Fuel (continuation) 2009 2008 Изм. Natural gas continued to remain the primary type of fuel in Company's fuel balance structure. Coal (1.4%) and fuel oil the 2009 fuel balance. Natural gas accounts for 98% of the (0.6%) were used by Mosenergo power plants as reserve fuel. TPP-20 1,691,449 1,782,192 -5.1% TPP-21 3,681,842 3,475,713 +5.9% TPP-22 3,366,835 3,566,925 -5.6% TPP-23 3,072,882 3,265,517 -5.9% Fuel Balance Structure, % TPP-25 2,871,984 3,328,893 -13.7% TPP-26 2,956,464 3,163,095 -6.5% 1.3 0.3 1.4 0.6 TPP-27 1,668,076 1,152,369 +44.8% Total, TPP 24,778,857 25,525,399 -2.9%

Section p. Section p. OJSC 'Mosenergo' Today 8. In 2009, the actual fuel rate of oil equivalent7for the supply of rate of oil equivalent for the supply of heat dropped by 0.4% to OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. electricity went down by 4.1% to 244.7 g/kWh; the actual fuel 165.9 kg/Gcal. Mosenergo Operations 14. Analysis of Financial Performance 24. Analysis of Financial Performance 24. 98.0 Social Responsibility 26. 98.4 Social Responsibility 26. Corporate Governance 32. Electricity Generation Fuel Rate, grf/kWh Heat Generation Fuel Rate, kgrf/Gcal Corporate Governance 32. Additional Information 36. 2009 2008 2009 2008 Additional Information 36. 244.7 255.1 165.9 166.5

The primary factor which allowed a substantial increase in increasing the specific share of steam-gas power units in Gas Coal Fuel Oil savings in 2009 was a 20.7% decrease in condensation cycle electricity generation. This share reached 18% in the non- generation on the TPP steam-turbine plant. heating season, when the efficiency of steam-turbines was at its peak. As we have already mentioned, the decrease in electricity Changes in the 2009 fuel balance structure compared to • creation of ample fuel reserves, under Ordinances and consumption in 2009 had a considerable impact on the Optimal substitution of condensation-type electricity 2008: the share of gas went down by 0.47%, whereas the Recommendations of the Russian Ministry of Energy, as operations of the Company's power plants. This decrease generation on steam plants for steam-gas units allowed the share of coal and fuel oil increased by 0.09% and 0.37%, well as Resolutions issued by the governments of Moscow ultimately determined the load of TPPs. Another factor was Company to considerably reduce unit costs for the supplied respectively. and the Moscow Region; the existence of steam-gas power units, which presently electricity. Despite the achieved success, the Company has • quality repairs of equipment used by fuel, transport and account for 11% of the Company's total electric capacity. not yet reached the limit of fuel use efficiency. One of the The increase of the share of fuel oil and coal was caused by gas facilities; promising ways to improve fuel efficiency is to transfer the a sharp temperature drop in December, when the major part • continuous control over the performance of fuel and These factors allowed the Company to transfer some of the heat load from RTS to TPP. of reserve fuel burning occurred. transport facilities, as well as timely repair of detected less fuel-efficient equipment to the cold reserve, as well as defects. A steady and uninterrupted fuel supply to all of Mosenergo power plants in 2009 was made possible by: The consumption of oil equivalent in the reporting year went • full volume of gas supply under existing contracts, as well down by 2.9% compared to the previous reporting period Investment, Repair and Maintenance Activities as the absence of restrictions on gas delivery; and amounted to 24,779 thousand tonnes of oil equivalent. Investment Activities

Fuel Consumption, Tonnes of Reference Fuel The 2009 Investment Programme was the first to follow the generating capacities in order to improve the safety of the new Guidelines for the Design of Mosenergo's Investment Moscow Region power system; 2009 2008 Change Programmes for One, Three and Ten Years. • projects dedicated to improving the efficiency and HPS-1 364,332 334,853 +8.8% facilitating the modernisation of the existing equipment; TPP-3 141,122 141,043 +0.1% The underlying principles of the investment programme • projects aimed at improving the safety of old include economic efficiency of investment, transparent generating capacities and TPP infrastructural facilities; TPP-8 1,044,673 1,223,847 -14.6% objectives, as well as compliance with output goals and the • mandatory projects carried out according to instructions TPP-9 544,178 559,171 -2.7% Company's strategy. of supervising entities and projects implemented under TPP-11 759,090 831,979 -8.8% progressive industry requirements for generating TPP-12 1,150,776 1,184,878 -2.9% The Company designed five types of investment projects: companies; TPP-16 1,152,681 1,169,170 -1.4% • strategic projects to increase the TPP output, which would • other investments with a minimal share. These projects TPP-17 312,473 345,754 -9.6% ensure a more efficient fuel burning and an increase in include all necessary capex relating to managerial, electricity and heat generation, as well as creating reserve socially-oriented and minor operations of the Company.

18 19 8 Galculated according to the physical analysis method 9 Investment Programme Implementation in 2009 Within the implementation of Safety Projects under the 2009 Number of Repairs in 2009 Investment Programme, the Company carried out the following Project Types Mn Roubles before VAT Equipment Major Repairs Medium-Turn Repairs Maintenance operations to improve the safety of the primary equipment: Strategic 5,394 – electric: Units 2 4 13 Efficiency 18 • we changed 22 110-500 kW switches (16 switches were Boilers 11 9 84 Safety 1,751 changed under the investment projects carried over from Turbines 4 3 70 Mandatory 194 2008); GTU 0 0 10 Other 473 • we changed or installed 39 phases of CT and VT of 110-500 PVK 5 0 65 kW (under the investment projects carried over from 2008); Total 7,832 Waste-Heat Recovery Boiler of the CCGT-450 - - 13 – mechanical: Within the implementation framework of Strategic Projects • we changed live steam pipelines on 4 turbines and 3 power Gas Turbine of CCGT-450 - - 13 under the 2009 Investment Programme, the Company carried boilers (TPP-16, TPP-21, TPP-22, TPP-26), total - 397 t; Gas Generator Turbine of CCGT-450 - - 5 out the following operations on the primary new construction • we changed high-temperature heating surfaces on 6 power Generators 7 7 Section p. Section p. sites: boilers (TPP-8, TPP-17, TPP-21, TPP-23, TPP-26), total - Transformers 12 - 47 OJSC 'Mosenergo' Today 8. OJSC 'Mosenergo' Today 8. • TPP-26. Turnkey construction of power unit steam- 426 t; Switches Mosenergo Operations 14. turbine-420 at plant 8 was executed by the Alst Group. Mosenergo Operations 14. 110-500 kW 14 3 Analysis of Financial Performance 24. Total electric capacity of the new facility is 429 MW; heat Within the implementation of Mandatory Projects under the Analysis of Financial Performance 24. Social Responsibility 26. capacity is 230 Gcal/hour. Commissioing of the new power 2009 Investment Programme, the Company carried out the Social Responsibility 26.

Corporate Governance 32. unit is scheduled for 2010. following operations: Volumes of Primary Repairs Aimed at Improving Efficiency and Safety of Mechanical Equipment Corporate Governance 32.

Additional Information 36. • TPP-12, 16, 20. Construction of steam-turbine-420. Total • Setting-up of the automated environmental monitoring Additional Information 36. electric capacity of the new facility is 420 MW; heat of Mosenergo and the transfer of data gathered at TPP- Operations 2009 2008 capacity is 230 Gcal/hour. The Company considered the 20, 21, 23, 25, 26 to the Public Managing Company Industrial repairs of turbine rotors 9 23 investment rationale for the construction, developed by 'Mosekomonitoring'. Replacement of turbine rotor blades / disks 14 24 Mosenergoproekt. Commissioning of steam-turbine-420 at • The implementation of the gas analyser complex in order to Replacement of components in the flow-through part of turbine cylinders 1 3 TPP-16 is scheduled for 2014. The Company is considering control and record emissions on 22 power and water boilers. Implementation of the forced steam cooling system for medium-pressure rotors (RSD-1) 13 alternative options for TPP-12 and TPP-20. • Mosenergo undertook 16 investment projects of T-250/300-240 turbines • GTR-TPP is located in the town of Pavlovskiy Posad. aimed at improving fire safety of its subsidiaries. Replacement of bearings in the lower support of the regenerating rotary air heater 4 6 Construction is completed. In October 2009, the Company Replacement of the heating surfaces of power boilers 50 72 commissioned two turbine units with an electrical capacity Within the implementation of Other Projects under the 2009 of 8 MW each and a heat capacity of 16 Gcal/hour. Investment Programme, the Company changed 3,962 metres of supply pipelines for Mosenergo heating mains. In 2009, the Company fully implemented measures for the special survey and diagnostics of the condition of metal. Within the implementation of Efficiency Projects under the 2009 Investment Programme, the Company installed pump drive Technical upgrade and reconstruction of the equipment of Measures for the Special Survey and Diagnostics of the Condition of Metal hydraulic couplings in six affiliate structures. The installation of Mosenergo subsidiaries will allow the Company to maintain a pump drive hydraulic couplings will allow a reduction of power high level of safety, reliability and efficiency of its equipment, Equipment Special Survey of Primary and Support- Maintenance Control of Mechanical needed for the drives in the part load regime. as well as increasing sales of electricity and heat. ing Mechanic Equipment Equipment Metal Power boilers 9 29 Boiler drums 12 6 Repairs and Maintenance Turbines 1 7 In 2009, the Company launched a programme to optimise • create typical volumes and estimates for maintenance of Steam pipes 20 84 repairs and maintenance operations. As a result of these the primary equipment; measures, the Company minimised the volume of repairs • transfer services after the cost appraisal of operations for carried out internally in favour of outsourcing. labour intensity; In 2009, the Company completed rotor repairs on seven of the Company's affiliates, within the scope of the annual • create groups of equipment to be repaired according to generators; the repairs involved the removal of the rotor end- programme, including: The Company adopted the Regulations on Mosenergo condition; winding retaining ring and performing a defect inspection. Maintenance Operations, which determined the primary • repairs and diagnostics of 37 smoke flues (27 smoke flues directions and mechanisms of efficient management of We are planning to use the results as early as 2011. When performing scheduled repairs on transformers T-97 were repaired in 2008); equipment repairs and maintenance. of TPP-21 and T-96 of TPP-23, the Company replaced oil- • overhaul and reconstruction of two cooling towers (No.1 at Under the 2009 repair programme, we revived the concepts filled bushings with 220 kW RIP-insulated bushings; 110 kW TPP-27 and No. 2 at TPP-23); Thus, in 2009, when designing the repairs programme for of power system durability (a full-scale training which allows bushings were replaced on T-96 of TPP-8, T-60 R2 and T-60 • maintenance of 21 fuel oil tanks (17 tanks in 2008). 2010 within the allocated budget, we applied the ranking a transfer to the burning of reserve and emergency fuel) and R3 of TPP-23. approach to repairs for the first time. It involved priority fuel oil mobilisation of the Company (preparing the equipment In 2009, the Company carried out chemical washes on 3 power criteria developed for each type of equipment undergoing to operate in the fuel oil regime). The Company performed diagnostics of 10 transformers boilers and the access control system unit of power plant 4 maintenance. on a special list, following a chromatographic analysis of at TPP-26, in order to ensure reliable and efficient equipment In 2009, the Company fully completed all of the servicing dissolved gas (CADG), as well as undertaking measures to operation and compliance with management directives. To improve the quality of planning and provide the rationale for programmes for the mechanical equipment according to the repair detected faults. expenses under the maintenance programme, the Company approved repairs schedules; the servicing was completed The total duration of repairs performed on primary equipment 20 set up operations to: within set deadlines and allocated funding: In 2009, we carried out repairs of buildings and facilities in 2009 amounted to 9,338 days (9,193 days in 2008). 21 9 According to Mosenergo management accounting Duration of Repairs, Days 46.0 mn roubles. This confirms the efficiency of measures regular power inspections of TPP-6 (affiliated structure of implemented in 2009, since the expenses were recovered in TPP-3) and TPP-12. Type of Repairs 2009 2008 less than a year. Major repairs 1,864 2,448 Mosenergo is a regular participant in the Moscow power Medium repairs 674 1,176 One of the key components of the power saving policy is saving programme; the Company makes annual contributions Maintenance 6,558 5,348 power inspections, which allow the determination of the to the increase of power supply efficiency. Maintenance 2 242 221 power efficiency potential at each power plant. Starting from 2008, Mosenergo launched regular (recurrent) power Taking into consideration the cost of power inspections, total Total Repair Site 9,338 9,193 inspections. In the reporting year, the Company conducted annual expenditure amounted to 48.6 mn roubles. Preservation 3,913 2,003 Servicing 391 329 Reconstruction 512 804 TOTAL, as Scheduled 14,154 12,329 Section p. Section p.

OJSC 'Mosenergo' Today 8. Implementation of Indicators for the Power Saving Programme OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. Efficiency and Safety of Production Mosenergo Operations 14. Analysis of Financial Performance 24. Indicator Name Measurement Unit Indicator Analysis of Financial Performance 24.

Social Responsibility 26. In 2009, Mosenergo strived to increase efficiency and safety: tion of indicators which influence TPP efficiency, as well as Savings of fuel and power resulting from the power saving programme, total thous., tsf 34.2 Social Responsibility 26.

Corporate Governance 32. we launched the 'Lean Production' project; initiated a project developing procedures enabling the operating staff to achieve Total electricity saved mn kWh 9.7 Corporate Governance 32.

Additional Information 36. to set up a unified service for the Health Safety Environment stability for these indicators during TPP operations. including electricity saved by cutting expenses for: Additional Information 36. System (footnote: see page 31); developed standard operating power plant auxiliaries mn kWh 9.7 procedures for the prevention of hazards; conducted a full- 5. Standardisation of planning and repairs of electric Total fuel saved thous., tsf 31.8 scale staff training regarding the transfer of equipment to equipment. reserve and emergency fuel. including by fuel type: In 2009, the Company implemented measures for the waste- coal thous., tsf 0.1 In March 2009, the Company started the implementation free output at TPP-23, TPP-21 and TPP-11. We approved the gas thous., tsf 31.4 of the 'Lean Production' project. The key objectives of this number of staff in the new organisation at TPP-25 and TPP- fuel oil thous., tsf 0.3 project are: 26. According to preliminary estimates, the annual effect The cost of resources saved due to the power saving programme thous., roubles 62 765.4 of the measures implemented at the unit power plant will The share of saved power resources in the total cost of fuel and power used % 0.1 1. Improving safety and efficiency of Mosenergo power plants amount to approximately 200 mn roubles; the figure for the through the implementation of initiatives introduced in the non-unit plant will be from 50 to 150 mn roubles, depending integrated programme for lean production. on capacity.

2. Simplification of power plant organisation. Mosenergo is planning to run the 'Lean Production' Project on all of the Company's power plants by 2012. These 3. Optimisation of cooperation procedures between business measures are aimed at a substantial reduction of long-term units, clear job descriptions for each employee working at malfunctions and equipment failures due to a higher quality SAP Implementation power plants affiliated with Mosenergo. of planning and organisation of repairs, as well as improving the power plants' technical and economic indicators resulting In 2009 Mosenergo started the implementation of a full-scale In 2009 the Company adopted SAP decisions in order to 4. Improving power plant operations through the standardisa- from more economical operation of the equipment. project to improve and standardise business processes, as manage the procurement process, stock management, sales, well as creating a strong system platform to ensure further management budgeting and accounting, taxation and general development and growth of the Company's operational accounting, investments, liquidity management and credit efficiency. The SAP system was rolled out within the three-year financing. 'Changing of Management Standards and CIS Implementation' Power Saving Programme Programme, which the Company is implementing from 2009 Following the implementation of the project's first stage, the to 2011. The first stage of this programme was titled 'Boost'. Company substantially improved efficiency of procurement Mosenergo's 2009 indicators for increasing fuel efficiency • activities performed following the test results from primary This stage was initiated in February 2009 and completed 11 and created a clear and transparent procurement scheme: are determined by the results of the annual power saving and supporting equipment. These activities are directed at months later, by January 2010. from initial ordering to payment. The new procurement system activities planned for the Company's subsidiaries. increasing equipment efficiency; allows the monitoring of all stages of procurement, namely • damage control related to the replacement, reconstruction The implementation of the new information system is carried demand, proposal, bidding, contracts, supply and payment. Power saving activities performed in 2009 included: and installation of new equipment. out both within the Head Office and on all of the Mosenergo's • operating activities related to the compression of furnaces, power plants. The total number of system users reaches about Following the implementation of SAP ERP and SAP BI systems, gas waste of boilers and turbine vacuum systems, cleaning Following the results of power saving projects performed in 1,200 people. The unified platform will substitute numerous Mosenergo achieved many other valuable advantages: an tube packs of condensers and heaters, as well as equipment 2009, total power and fuel savings achieved by Mosenergo informational systems used in each affiliate, in order to opportunity to use a joint directory of materials and business preservation; in terms of oil equivalent amounted to 34.2 tonnes, while increase operational efficiency and accuracy of information partners created during the project implementation, as well as • activities aimed at optimising equipment load and opera- cost savings reached 62.8 mn roubles. In addition, total across the Company, as well as improving the flexibility of electronic contract negotiation and improvement of internal tion regime at power stations; expenditure for these power saving activities reached Mosenergo external operations. audit procedures.

22 23 Following the implemented measures, running costs were bond loan of 4.6 bn roubles (no bonds were produced), as well Accounts receivable grew by 11,325.4 mn roubles, primarily Analysis of reduced by over 5%, compared to 2008. These savings as making an initial issue of stock bonds for 2 bn roubles (one due to advance payments to contractors for capital construction resulted from the implementation of several initiatives, year maturity, annual interest rate of 11.45%) and five-year and equipment delivery. Financial Performance including: corporate bonds for 5 bn roubles (three-year offer, coupon rate 1. the 'Lean Production' Project; of 10.25% per annum). The long exposure of the loan portfolio Furthermore, 2009 saw a downturn in collection of accounts 2. implementation of the integrated SAP information system; was substantially increased (up to 90% of the portfolio). receivable under contracts for sales of electricity and capacity, 3. centralisation of supporting operations in the subsidiaries; which happened on the back of the credit crunch. This resulted 4. carrying out efficient procurement procedures. The weighted interest rate for leverage amounted to 12.8% p.a. in in an increase of current accounts receivable. The Company's Revenue 2009. The increase of the weighted interest rate resulted from the Management estimates these receivables as actually enforceable. According to 2009 results, EBITDA reached 17.8 bn roubles, unstable situation on the world and domestic financial markets In 2009 sales revenue from commodity output (before VAT) an increase of 9.5 bn roubles (210%) over 2008. and substantial fluctuations of currency and interest rates, and The Company maintains regular operations to enforce customer reached 112.2 bn roubles, including sales of electricity and specifically, a considerable increase of the MosPrime rate. payments and recover defaulted receivables for the supplied power. heat which amounted to 104.1 bn roubles; sales of other Other Gains and Expenses Section p. goods, works and services totalled 8.1 bn roubles. In December 2009, Standard&Poor’s noted a significant Advance payments in the reporting period increased due Section p. OJSC 'Mosenergo' Today 8. The decrease of profits and returns on investments by 14.4 bn improvement of the Company's liquidity and removed the to growing amounts of advance payments for the capital OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. Compared to 2008, revenue from commodity output grew roubles and 15.3 bn roubles, respectively, happened mainly Company's rating from the 'negative revaluation' list. construction of power units on TPP-26. Mosenergo Operations 14. Analysis of Financial Performance 24. by 18.4% and the revenue from power sales increased by due to the acquisition and redemption of notes in 2008; the Analysis of Financial Performance 24. Social Responsibility 26. 21.3%. Revenue growth was primarily accounted for by the volume of such operations in 2009 was insignificant. The Company has no defaulted debts and loans. Mosenergo shareholder equity went up by 4,853.6 mn roubles, Social Responsibility 26.

Corporate Governance 32. rise in electricity and heat tariffs, as well as an increase in primarily due to an increase of the net profit volume, as well as Corporate Governance 32.

Additional Information 36. the volume of sold capacity due to the commission of new In 2009, the Company carried out a full-scale operation to The majority of the Company's loans have a variable interest rate. following revaluation results. Additional Information 36. gas turbines. reorganise the system for non-core asset management. Thus, in 2Q09 the Company redirected a cash inflow of 1 bn The Company's Management takes steps to increase the share Payables went up by 1,658.9 mn roubles, or 12.8% compared to Net Cost roubles from investment activities to the sale of the share in of long-term loans with a fixed interest rate. 2008. The specific share of payables in the Company's balance Transinvestbank. In 3Q09 and 4Q09 the Company sold a cluster currency at the end of the year amounted to 7%. All debts are Net cost of Mosenergo 2009 output amounted to 105.1 bn of buildings on Raushskaya embankment and Agroholding Balance Structure Analysis current, incurred under contractual payment conditions. roubles, including power costs of 97.4 bn roubles and other Shaturskiy. These transactions had a considerable influence on commodity costs of 7.7 bn roubles. the growth of income from and expenditure on the sale of other As of December 31, 2009 fixed assets went down by 2,408.6 Analytical Indicators of the Net cost of the main product output rose by 16.8%. Net cost assets owned by the Company. mn roubles (from 134,978.9 mn roubles to 132,570.3 mn Company's Financials before fixed asset amortisation increased by 13.8% (from 66.5 roubles), a decrease of 2% compared to the results registered bn roubles to 75.7 bn roubles). Furthermore, in 2009, the Company carried out a full- on December 31, 2008. As of 2009 year end, the Company registered a positive growth scale operation to reorganise the system of non-core asset trend for indicators of absolute and current liquidity, as well as The increase in tangible costs in 2009 compared to the previous management: apart from selling Agroholding Shaturskiy, Changes in fixed assets in the reporting period happened for the financial stability indicator. The improvement of these reporting period was primarily caused by an increase in fuel the Company cut down the expenditure required for the primarily due to: indicators resulted from the restructuring of the Company's cost. The growth of fuel cost was primarily triggered by a 17% maintenance of non-core assets; some of these assets were • inflow of fixed assets amounting to 9,312.9 mn roubles; loan portfolio in favour of long-term loans, on the back of an hike in gas cost. liquidated. outflow of fixed assets reached 2,798.9 mn roubles (mainly due overall decrease of loan debts. to sales); Total expenditure in 2009 for maintenance of power plants, Net Profit • increase in accrued amortisation totalled 8,922.6 mn roubles A drop in the total assets turnover indicator was caused by the including contracted repairs, amounted to 4.9 bn roubles or (due to the revaluation). revaluation of several fund types, as of January 1, 2009. 5.1% of all power generation costs. The Company's net profit after income tax and other compulsory payments amounted to 4.5 bn roubles. Net profit grew by 330% As of January 1, 2009 the Company completed a revaluation of its An increase of the receivables turnover indicator is mainly Labour costs dropped from 9.0 bn roubles in 2008 to 8.1 bn compared to 2008. fixed assets. The revaluation amounted to 41,947.1 mn roubles. linked to an increase in volume of advance payments allocated roubles in 2009 (a decrease of 0.9 bn roubles or 10%). to capital constructions (43%). According to Article 8 of the Company's Charter, the amount of A decrease in 'construction-in-progress' assets of 3,748.9 mn The rise of heat transfer costs (3.5 bn roubles) is linked to a compulsory annual Reserve allocations is 5% of the Company's roubles resulted from the implementation of the investment The average amount of Mosenergo's balance currency grew by 2009 increase in tariffs for such services. net profit before it reaches the required amount (5.0% of the programme, which envisaged the allocation of fixed assets to 2.2% as compared to 2008. In addition, the growth of revenue Company's registered capital). the commissioning of facilities. from commodity sales went up by 18.4%, over 2008. A considerable increase in spending for amortisation (57%) resulted from a revaluation, which was carried out in 2009, Liquidity and Loan Portfolio Management The fixed asset structure includes: accounts receivable - 63%, The growth of sales profitability, commodity output and according to the Company's accounting policies. short-term investments - 22% and inventories - 8%. aggregate capital resulted from the following factors: Cash inflow from operations in 2009 outperformed 2008 • revenue growth rates outperformed the rate of cost On the whole, the growth rate for operational expenses was results. In 2009, Mosenergo's current assets increased by 10,399.9 mn growth; lower than revenue growth, which led to a rise in the Company's roubles or 22.1% over 2008. This increase is mostly attributed • other gains increased as a result of the reorganisation of sales profitability. In 2009, the Company successfully carried out the offer on the to changes in the accounts receivable. the non-core asset management system.

24 25 Changes in the Number of Staff Social Responsibility and Average Monthly Wages

In 2009, there were 12,487 staff on payroll, which decreased by 3,762 employees compared to the previous reporting period (16,249 people in 2008). Human Resources Management Staff Structure, % Staff Age Structure, % and Social Programmes Number of Staff on Payroll

16.0 Headcount and Structure of Personnel 16,249 Section p. Section p. OJSC 'Mosenergo' Today 8. As of December 31, 2009 the number of Mosenergo employees 31.6 OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. reached 11,124. 36.0 12,487 Mosenergo Operations 14. Analysis of Financial Performance 24. Analysis of Financial Performance 24.

Social Responsibility 26. Образовательный уровень работников ОАО «Мосэнерго» 68.4 Social Responsibility 26.

Corporate Governance 32. The education level of Mosenergo's staff is sufficiently high. Corporate Governance 32.

Additional Information 36. - 23.2 % Additional Information 36. 3,935 Company employees have higher education, which amounts to 34.7% (29.4% in 2008), 48.0 25.6% of the staff has vocational training (24.4 % in 2008).

51 employees have post-graduate degrees. The Company Men Women employs 46 candidates of science and 5 employees with PhD Up to 30 y.o. 30-50 y.o. over 50 y.o. degrees.

Staff Structure by Length of Employment in Mosenergo, % The number of staff changed due to several factors: • optimisation of the structure of power plant supporting op- erations through outsourcing, as well as the centralisation of administrative and supporting operations in the Head Of- 17.0 11.0 10.0 fice of Mosenergo; 23.0 26.0 • reorganisation of maintenance and other affiliates through 9.0 10.0 the outsourcing of such functions as equipment design and 35.0 procurement, construction of power facilities and creation of an EPC-contractor, TEK Mosenergo, as well as the re- 8.0 distribution and transfer of functions previously performed 8.0 by Power Connections and IT Centre to the Head Office; • reorganisation of the non-core assets management sys- 17.0 tem, which involved: liquidation of several non-core as- 13.0 17.0 sets (medical and sanitary division, canteens and retail 14.0 48.0 outlets).

17.0 17.0 The average monthly wage of Mosenergo's internal staff in Up to 30 y.o. 30-50 y.o. over 50 y.o. 2009 amounted to 47.9 thousand roubles, which is 16.8% higher than last year.

Up to 5 years 6-10 years 11-15 years 16-20 years The share of Mosenergo employees over 55 went down by 21-25 years 26-30 years over 31 years 1.2% (16.2% in 2008) and amounted to 15% in 2009.

26 27 Average Monthly Wage per Employee, thous. roubles managers and specialists completed training and advanced opportunity to implement a unified occupational health and performance of operations; training courses. The training took place in the New Educational safety policy and to reduce the decision-making time, as • providing staff with occupational health and safety training 47.9 Facility 'CPK Mosenergo', as well as in external accredited well as to determine primary short- and long-term directions and professional development; organising occupational educational institutions. Furthermore, more than 1,100 for the development of occupational health and safety in the health and safety drills; members of the Company's staff completed training within the Company. • thorough education of staff on the instances of workplace 41.0 framework of the Boost SAP Implementation Project. injuries; Within the implementation framework of the Mosenergo • participation in industry and inter-industry exhibitions on Social Programmes Management's policy aimed at ensuring occupational health occupational health and safety; and safety in the Company, we are undertaking the following • equipping and fitting out areas dedicated to accident The Company's social policy is the responsibility Mosenergo measures: prevention; fulfils as a reliable employer. • monthly Occupational Health and Safety Day, scheduled and • providing, prior to the start of repairs, special CPR training random work place inspections; using human manikins to managers, producers, headmen, + 16.8 % Mosenergo has a strong focus on employee health. The • providing the staff with certified materials for individual shift engineers, foremen of special programmes, as well as Section p. voluntary medical insurance programme is an important and communal protection kits and devices ensuring safe to all other staff. Section p. OJSC 'Mosenergo' Today 8. part of Mosenergo's social package. This programme OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. provides healthcare support and decease prevention. In Mosenergo Operations 14. Analysis of Financial Performance 24. 2009, the Company conducted an employee satisfaction Analysis of Financial Performance 24. Social Responsibility 26. research regarding the quality of services provided under the Social Responsibility 26. Corporate Governance 32. programme. According to the survey of 596 employees, 90 % Occupational Health and Safety Costs, thous. Roubles10 Corporate Governance 32. Additional Information 36. of staff members were generally satisfied with the quality of Additional Information 36. hospitals and clinics and would use their services again. Name of Expense 2009 2008 To facilitate health and well-being of the employees, the Company provides staff members and their families with the Total occupational health and safety expenditure, including: 247,003 186,383 Staff Motivation System benefit of exercise in the Company's gymnasiums. Furthermore, in 2009 Mosenergo participated in the staff summer Olympics – accident prevention activities; 10,237 6,471 According to target development objectives for 2009, organised by Gazprom. Pre-event training secured successful the Company carried out the implementation of new staff performance of the Company's athletes: around 700 employees – activities aimed at preventing workplace-related illnesses; 62,029 36,173 motivation and performance appraisal methods. The key competed in nine sports during Mosenergo's Olympics. objective is to set up a transparent and flexible system, which – activities aimed at improving general working conditions; 144,348 105,516 will focus on employee job specifics in various divisions, as Mosenergo continues to implement Occupational Pension well as creating a strong correlation between staff performance Scheme; the Company also introduced a one-off payment of – providing employees with means for individual protection; 30,389 38,223 and remuneration. 40,000 roubles for WWII veterans, as well as the payment of 25,000 roubles to people employed in the war effort. 900 The following changes were introduced in the reporting year: people received compensation. 1) implementation of the new salary system which increased the monetary share in salaries; In 2009, the Company signed a union contract with employee 2) creating unified standards for the staff motivation representatives, namely Moscow Municipal Committee and system across all of the Mosenergo's power plants; Moscow Regional Committee. The contract was based upon the Organisation and Implementation of 3) development and implementation of key performance Labour Code of the Russian Federation and the Power Industry Activities Dedicated to Psychophysiologic indicators (KPI) for the Company's production personnel; the Tariff Agreement. The union contract of 2009 was modified to Mosenergo Accident History, Instances indicators became the basis for the calculation of wages and increase various rates and payments. Support of Staff Professional Operations bonuses. The contract is based on principles of equality, respect and regard According to Mosenergo's Ordinance published on December Staff Education and Development for rights and legitimate interests of the parties to Mosenergo's 12, 2005, the service is responsible for the psychophysiologic social partnership, as well as principles of voluntarism, legality supervision of professional competencies of new staff, as well In 2009, the Company launched the Recurrent Performance and incurring and fulfilling of responsibilities. as the staff being promoted to executive positions. Starting from Appraisal Project. The active implementation phase of this 2Q09, the Company has been organising an ongoing training to project is scheduled for the beginning of 2010. The new In 2009, Mosenergo developed the Regulations which govern improve employee self-control and prevent misjudgement and updated system of recurrent performance appraisal is aimed at the organisation of recreational activities for employees and occurrence of incidents. This year, the Company organised 13 creating a performance management system, the development their children. Sports and healthcare summer camps provided training sessions for 98 employees. The Company also organised of cooperation and mutual aid, as well as establishing a recreational activities for 440 children of the Company's restoration facilities helping to improve the efficiency of production continuous professional and career development of employees. employees personnel working day and night shifts, as well as helping to deal According to the Guidelines for Staff Training, Mosenergo with the post-traumatic shock after injuries: in 2009, the Company offered training, retraining and advanced staff training Occupational Health and Safety organised 1,089 of these recovery sessions. We provided 272 throughout 2009. Number of Accidents, Total psychological consultations for production personnel and Due to the restructuring of the occupational health and Fatal Accidents managers aimed at decreasing the risks of misjudgement. As a result, 4,244 members of the general staff and 3,621 safety management system in 2009, the Company had an 28 29 10 According to Mosenergo management accounting Commitment to Environmental Protection Environmental issues are resolved in close cooperation with • Total volume of water emissions in surface waters Office will be expanded by a division responsible for issues of public authorities authorised to regulate conservation activities of amounted to 371.0 mn cubic metres, including 353.5 occupational safety and environmental protection, as well as enterprises in the Moscow Region. mn cubic metres of regulatory clean emissions and 17.5 for the development of Regulations governing these activities Mosenergo maintains productive cooperation with Russian mn cubic metres of treated emissions. The reduction of in the Company. organisations, as well as scientific and educational establishments In 2009, Mosenergo's expenditure on conservation activities emissions volumes over 2008 amounted to 92.4 mn cubic successfully working in the field of environmental protection and amounted to 154.6 mn roubles. metres. Under the project, the Company is planning to implement two environmental safety. • Total volume of waste went down by 58 thousand tonnes pilot modules: and totalled 140.3 thousand tonnes. • prevention and emergency response to worst-case situations; • technical audit. Mosenergo's Expenses on Conservation Activities, thous. Roubles11 Mosenergo's Water Emissions, mn cubic metres The implementation of OC and EP modules will be integrated in 2007 2008 2009 the programme of activities dedicated to TA, OC, EP and worst- 463.4 case situations by 2015; the implementation of these functions 457.9 447.5 Section p. 443.9 will be carried out by the units' management. Section p. OJSC 'Mosenergo' Today 8. Activities other than basic (net cost) 102,143 86,064 58,781 OJSC 'Mosenergo' Today 8. 371.0 Mosenergo Operations 14. 353.4 The implementation of pilot modules means the implementation Mosenergo Operations 14. Analysis of Financial Performance 24. Activities other than basic (non-sale expenses) – – – of all integrated measures regarding these issues, as well as Analysis of Financial Performance 24. Social Responsibility 26. establishing standard operating procedures, training of staff Social Responsibility 26.

Corporate Governance 32. working in the Head Office and TPP, development of action Corporate Governance 32. Waste recycling (net cost) – – 43,192 Additional Information 36. plans for worst-case situations, as well as the launch of the Additional Information 36. implementation process for these activities and supervision of Investment activities 94,060 97,031 52,628 their execution. Expected results: Environmental surveys 12,116 10,852 – 1. Steady decline of indicators for injuries and accidents in the Company, reaching average European figures by 2015. 2. ПImprovement of quality of operations aimed at preventing Equipment which does not require assembly 1,946 1,381 – worst-case situations, as well as an increase of response Total Regulatory Clean Emissions times and performance of activities dedicated to emergency Total 210,264 195,327 154,601 response. 3. Minimising environmental impact.

The recertification audit conducted in Mosenergo in 2009 In 2009, target emission standards for any of the ingredients Dynamics of Mosenergo's Emissions, t confirmed that the Company's Environmental Management were not exceeded across all power plants. System complies to the international ISO 14001-2004 standard. The audit was performed by the Bureau Veritas Certification The Company's measures for environmental protection in 2009 Body. 55,782 resulted in: 53,547 54,823 • a slight increase of emissions of pollutants on the Establishing of the Advanced Health Company's power plants by 2.4% compared to 2008 or by 45,174 43,782 Safety Environment System 53.5 thousand tonnes to 54.8 thousand tonnes, including 42,545 by the ingredient: • the quantity of solid pollutants went down from 2.6 In 2009 the Company initiated the project titled 'Creating of the thousand tonnes to 2.1 thousand tonnes of by 0.5 thousand Unified Technical Audit, Occupational Safety and Environmental tonnes (19.3%); Protection Service' (TA, OS and EP). This project was developed • the quantity of sulphur dioxide emissions went up from 6.7 in compliance with the best international practice, based on thousand tonnes to 9.6 thousand tonnes of by 2.9 thousand minimising risks and after-effects of dangerous situations, tonnes (44.1%); 9,619 protection of the Company's interests through high internal • the quantity of nitrogen oxide emissions went down from 7,535 6,673 standards of occupational and industrial safety, as well as 43.8 thousand tonnes to 42.5 thousand tonnes of by 1.3 2,648 2,582 2,084 environmental protection. thousand tonnes (2.8%); The project task group includes employees of the technical audit, The increase of sulphur dioxide emissions occurred due to a technical service, corporate security, as well as representatives rise of the quantity of burnt fuel oil and coal resulting from Total Nitrogen Oxides Sulphur Dioxide Solids of the Roland Berger Strategy Consulting company. Within the unusually cold weather conditions. framework of the project, the structure of the Company’s Head

30 31 11 According to Mosenergo management accounting Charter, as well as internal documentation of the Company Company's applicable Regulations. Moreover, the new draft Deputy Chairman. Corporate Governance regulating corporate bodies at the Annual General Meeting of Mosenergo's Charter, as well as the following new drafts of shareholders in 2010. The approval of these documents is of the documents regulating corporate bodies were approved During 2009 the BoD of OJSC Mosenergo held 16 meetings within the competency of the General Meeting of the Company's at the Meeting: dealing with 126 issues. shareholders. • the new draft of the Regulations on the General Meeting of Shareholders of the Open Joint Stock Company of Power The most important issues considered by the BoD in 2009 are The most important objectives of the corporate governance in Industry and Electrification Mosenergo; the following: Mosenergo are the following: • the new draft of the Regulations on the Board of Directors • approval of OJSC Mosenergo Business Plan for 2009; Underlying Principles • safeguarding the balance of interests of all shareholders, of the Open Joint Stock Company of Power Industry • approval of OJSC Mosenergo Investment Programme for as well as other persons interested in the continuous and Electrification Mosenergo; 2009; The Company defines corporate governance as a totality of development of the Company; • the new draft of the Regulations on the Executive Board • issues regarding the preparation for the General Meeting of procedures dedicated to the management and supervision of • maintaining the required level of transparency and access of the Open Joint Stock Company of Power Industry Shareholders, including recommendations to the Meeting of activities and including relations between shareholders, BoD and to the Company's information; and Electrification Mosenergo; Shareholders regarding profit allocation and approval of the Section p. executive bodies of OJSC Mosenergo. The Company considers • organisation of operations of the BoD's committees with • the new draft of the Regulations on the General Director Company's Performance Report for 2008; Section p. OJSC 'Mosenergo' Today 8. corporate governance as a way to build on competitiveness, the participation of representatives of large-stake holders, of the Open Joint Stock Company of Power Industry • appointing members of the BoD's Committees; OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. strengthen the reputation, and protect rights and interests of Company's specialists and independent experts; and Electrification Mosenergo; • appointing members of the central procurement unit Mosenergo Operations 14. Analysis of Financial Performance 24. its shareholders. • active participation of the Company in management • the new draft of the Regulations on Procedures of the Company and determining its work schedule, Analysis of Financial Performance 24. Social Responsibility 26. of its affiliate structures, the participation of the for Remuneration and Bonuses to Members of the BoD as well as introducing amendments to local regulatory Social Responsibility 26.

Corporate Governance 32. Underlying principles of the Company's corporate governance Company' representatives in assemblies, meetings of the Open Joint Stock Company of Power Industry documents of the Company, dedicated to the organisation Corporate Governance 32.

Additional Information 36. are laid out in the OJSC Mosenergo's Corporate Governance of the executive bodies and other corporate events and Electrification Mosenergo. of procurement; Additional Information 36. Code and are based on the legislative regulations of the Russian of the Company's affiliates, non-profit and other • approval of OJSC Mosenergo Union Contract for 2009; Federation, the Company's Charter, Corporate Governance organisations where the Company acts as a member; Board of Directors and its Committees • preliminary approval of the transaction with ВNР Paribas Code recommended for use by FCSM's decree o. 421/p dated • separation of non-core business activities, optimisation of the regarding the refinancing of the contract with ALSTOM April 4, 2002, as well as on the corporate governance principles Company's structure and the reduction of management cost. The Board of Directors of OJSC Mosenergo is the Company's (Switzerland) Ltd, Alstrom, Ltd and EMAlyans, Ltd.; recognised in the international practice. governing body according to the Federal Law 'On Joint Stock • decision regarding the course and objectives of the Company's The management bodies of the Company are the General Companies' and the Company's Charter. The Board of Directors preparation for autumn and winter of 2009 and 2010; The Company's corporate governance is based on the following: Meeting of Shareholders and the Board of Directors. The is the general supervisor of the Company's activities, with the • approval of OJSC Mosenergo Insurance Programme for 2010. • BoD's accountability to shareholders and the accountability executive bodies of the Company are General Director and the exclusion of resolving issues under the authority of the General of the Company's executive bodies to the Company's Executive Board. Supervision of the Company's financial and Meeting of Shareholders. Furthermore, BoD considered the following issues: management bodies, as well as trust regarding relations business activities is the responsibility of the Mosenergo's • about the approval of important conditions of interest party between all participants of the corporate governance. Audit Committee. Members of Board of Directors of the OJSC Mosenergo as of transactions, as well as real estate transactions; • safety and efficiency of stock ownership rights and a December 31, 200912: • about the Company's position on the agenda of General possibility for unrestricted and fast carve-out of stock owned General Meeting of Shareholders 1. Kirill Gennadievich Seleznev (Chairman) Meetings of Shareholders (Equity Holders) and Meetings by shareholders, as well as providing shareholders with 2. Pyotr Pavlovich Biryukov of the Boards of Directors of subsidiaries and affiliates access to effective protection in case of breach of privileges; The General Meeting of Shareholders is the supreme governing 3. Anatoliy Anatolievich Gavrilenko structures of OJSC Mosenergo; • transparency of activities, disclosure of accurate information body of OJSC Mosenergo, which allows shareholders to 4. Valeriy Alexandrovich Golubev • other issues under the competency of the Company's Board on important facts and the information about the Company's exercise their right to take part in the Company's management, 5. Alexander Pavlovich Dushko of Directors. activities, providing required access to the information, as well as well as gives them access to the information about the 6. Igor Vyacheslavovich Ignatov as maintaining reasonable balance between the Company's Company's activities, achievements and plans. The procedure 7. Alexey Alexandrovitch Mityushov In 2009, the most important issues under the authority of transparency and pursuit of its commercial interests; for preparation and holding of general meetings of shareholders 8. Olga Petrovna Pavlova the Company's BoD were tentatively discussed by the BoD's • Company's social responsibility, including adherence to complies with legislature of the Russian Federation. This 9. Vladimir Nikolaevich Silkin Committees. The Company has set up the following committees: quality standards, environmental regulations and creating procedure is defined in the Company's Charter and in the 10. Evgeniy Viktorovich Sklyarov Audit Committee, Strategy and Investment Committee, Staff the most advanced working conditions; Regulations on the General Meeting of Shareholders of OJSC 11. Denis Vladimirovich Fyodorov and Remuneration Committee, Safety Committee. • adherence to ethical norms preventing staff misuse of Mosenergo; it follows the optimal corporate governance 12. Nikolay Grigorievich Shulginov official positions, which can damage both the Company and practice. The established procedure guarantees equal treatment 13. Vitaliy Georgievich Yakovlev Members of the BoD's Committees, which started working after third parties, including illegal use of confidential and insider of all shareholders of the Company. the Annual General Meeting of Shareholders held on June 30, information. New members of the Board of Directors were elected at the 2009, were elected at the Meetings of the BoD on August 21, 2009. The General Meeting of Mosenergo's Shareholders dedicated General Meeting of Shareholders of OJSC Mosenergo on Mosenergo's strategy for the improvement of corporate to the Company's results in 2008 took place on June 30, 2009. June 30, 2009. Furthermore, according to the voting results In the previous year, Committees of the BoD developed and governance mechanisms involves the activation of operations During the meeting, shareholders approved Mosenergo's at the Annual General Meeting of Shareholders, two members submitted for approval to the BoD recommendations regarding of the BoD's committees, better quality of document annual report for 2008 and the Company's accounting report of the Board of Directors were relieved of their authority: the following issues: preparation for BoD's meetings, including through preliminary including the income statement and profit allocation according B. V. Budzulyaka and Y.A. Udaltsova. These members were • approval of OJSC Mosenergo Business Plan for 2009; discussion of issues to be addressed at BoD's meetings within to the results achieved in 2008 (it was decided not to pay replaced on the Mosenergo's Board of Directors by: A. • approval of OJSC Mosenergo Investment Programme for the framework of committee operations and cooperation dividends on the Company's common stock according to 2008 P. Dushko - Deputy Head of the Finance and Economics 2009; between the Company's divisions and representatives of its results). Furthermore, Mosenergo's shareholders elected new Department of OJSC Gazprom and I.V. Ignatov - Deputy Head • issues regarding the preparation for the General Meeting of shareholders. members of the Board of Directors and the Company's Audit of the Property Department of Moscow City. Shareholders, including recommendations to the Meeting of Commission, approved the Company's Auditor, resolved the Shareholders regarding profit allocation and approval of the In order to improve corporate governance, Mosenergo payment of bonuses and compensations to the members At the first meeting, the newly elected Board of Directors Company's Performance Report for 2008; 32 is planning to approve the new draft of the Company's of the BoD and the Audit Commission according to the appointed K.G. Seleznev as its Chairman and P.P. Biryukov as • other issues important for the Company. 33 12 Additional information about members of the BoD is provided in paragraph 6.6. of the Annual Report Audit Commission According to the Company's Charter, General Director performs compensations to members of the BoD of OJSC Mosenergo The amount of remuneration of the Company's General the functions of Chairman of the Company's Executive Board. are determined in the Regulations on Determination of the Director is determined according to the System of Incentives In order to exercise control over the Company's financial and Amount of Remuneration and Compensations to Members for the General Director of OJSC Mosenergo (approved by a business activities, the General Meeting of Shareholders elects Rights and obligations of the General Director and members of of the BoD of OJSC Mosenergo, approved by the General decision of the Company's BoD on November 6, 2009); this five members of the Audit Commission. the Executive Board pertaining to managing current operations Meeting of Shareholders on June 30, 2009. According to these System includes official salary and quarterly bonuses based of the Company are determined by legislation of the Russian Regulations, the remuneration fir members of the BoD consists on KPI. The Company's Audit Commission operates according to the Federation, the Company's Charter, the Regulations on the of the basic and additional parts. legislation of the Russian Federation, the Company's Charter Company's General Director and the Regulations on the The amount of remuneration of members of the Company's and the Regulations of the Company's Audit Commission. Company's Executive Board. The basic part of the remuneration constitutes the remuneration Managing Board is determined by a decision of the BoD of OJSC paid to members of the Company's BoD for their participation in Mosenergo (Minutes 15 of the Meeting held on January 30, The Company's Audit Commission conducted an audit of At the BoD meeting held on February 13, 2009, the Company's the meetings of the BoD. The amount of the paid remuneration 2006); this amount is paid in shares of the salary established documentation regarding financial and business operations of BoD amended the number of members of the Executive is equivalent to four minimal monthly rates of a first labour by the Company. OJSC Mosenergo in 2009. Based on the results of this audit and Board13. The BoD terminated the authority of several members grade worker, set by the industrial agreement of the Electricity Section p. the Report of the Company's Auditor, the Audit Commission of the Executive Board, namely Y. E. Dolin, N.M. Sandler and and Power Complex of the RF. The aggregate amount of remuneration paid for performing job Section p. OJSC 'Mosenergo' Today 8. prepared a Certificate confirming the accuracy of the L.M. Tsenin. The BoD determined the number of members on functions in 2009 to members of the Managing Board totaled OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. information contained in reports and other financial documents the Executive Board at 11. The BoD elected new members of The additional part of the remuneration is paid to members of 2,364,990 roubles. Mosenergo Operations 14. Analysis of Financial Performance 24. of the Company in 2009. the Executive Board: A.I. Dmitriev, Deputy General Director of the Company's BoD according to the results of the financial Analysis of Financial Performance 24. Social Responsibility 26. OJSC Mosenergo for procurement and production furnishing, year, if such results include net profit of the Company. The total Changes in the Company's Structure Social Responsibility 26. Corporate Governance 32. Audit Commission Members V.Y. Tulskiy, Investment Director of OJSC Mosenergo. amount of the additional part of the remuneration based on the Corporate Governance 32.

Additional Information 36. Company's performance shall not exceed five per cent of the In order to achieve strategic objectives and solve current Additional Information 36. • Andrey Viktorovich Belobrov, Deputy Head of the Department Members of Executive Board of the OJSC Mosenergo (as of Company's net profit, gained according to the results of the tasks of OJSC Mosenergo, the Company is enhancing its - Head of the Department for Control of Organisations December 31, 2009): financial year when current members of the BoD were elected organisation. Providing Reliable Operations of the Gas Supply System in 1. Vitaliy Georgievich Yakovlev (Chairman) into office. the Department of Internal Audit and Control of Finance and 2. Elena Viktorovna Andreeva Within the framework of activities aimed at optimisation of the Business Operations of Subsidiaries and Affiliates, as well 3. Svetlana Vladimirovna Antonova The additional part of the remuneration based on the Company's organisation and property management of OJSC Mosenergo in as Organisations of the Management Administration of OJSC 4. Dmitri Alexandrovitch Barshak performance is not paid to members of the BoD who attended 2009, the BoD made decisions to liquidate several subsidiaries Gazprom. 5. Ivan Vasilievich Galas less than half of all meetings of the BoD (from the date of the of OJSC Mosenergo. TPP-6 subsidiary was liquidated through • Elena Vladimirovna Goldobina, Chief Economist of the 6. Artyom Igorevich Dmitriev election and until termination of the authority). merger with TPP-3. TPP-28 subsidiary was liquidated Department for Control of Organisations Providing Reliable 7. Nikolay Alexeevich Zroychikov through merger with TPP-21. The Company also liquidated Operations of the Gas Supply System in the Department of 8. Alexander Sergeevitch Ivannikov The aggregate amount of the remuneration paid to members of the following subsidiaries: The Enterprise for Production and Internal Audit and Control of Finance and Business Operations 9. Vladimir Valentinovich Sergeev the BoD in 2009 totaled 13,965,557 roubles. Technological Integration (EPTI), Pilot Plant for Automation of Subsidiaries and Affiliates, as well as Organisations of the 10. Vasiliy Yurievich Tulskiy and Instruments (PPAI), Special Design and Technological Management Administration of OJSC Gazprom. 11. Anna Sergeevna Tsaregorodtseva The payment of remuneration and compensation to members of Department for High-Voltage and Cryogenic Technology (SDTD • Rafael Vladimirovich Ishutin, Head of the Department of The major objectives of Mosenergo's Managing Board are: the Audit Commission is carried out according to the Regulations HVCT), Mosenergospetsremont (MESR), Moscow Design Internal Audit and Control of Finance and Business Operations • safeguarding rights and legitimate interests of the Company's on Payment of Remuneration and Compensations to Members Office for the Development of Power Facilities (MEF) and the of Subsidiaries and Affiliates, as well as Organisations of the shareholders; of the Audit Commission of OJSC Mosenergo, approved at the Medical Service. Corresponding amendments were made in the Management Administration of OJSC Gazprom. • developing proposals for the Company's development General Meeting of Shareholders on May 30, 2002. Company's Charter. • Vitaliy Anatolievich Kovalev, Deputy Head of the Department strategy; for Control of Organisations Providing Reliable Operations • implementing financial and business policy of the Company, Members of the Audit Commission receive a one-off payment for In the reporting year the BoD also resolved to liquidate of the Gas Supply System in the Department of Internal making decisions on the most topical issues of the Company's their participation in the audit of financial and business activities such subsidiaries as the IT Centre and Thermal Networks. Audit and Control of Finance and Business Operations of current business operations and coordinating the work of the of the Company. This amount paid equals three minimum The Company is working on the liquidation of the Central Subsidiaries and Affiliates, as well as Organisations of the Company's divisions; monthly wages of a first labour grade worker. Furthermore, Repairs and Mechanical Factory, Mosenergonaladka (MEN), Management Administration of OJSC Gazprom. • improving the efficiency of the systems of internal control members of the Company's Audit Commission are entitles to Moselectroremenergo (MERE), Sales and Output Enterprise for • Evgeniya Sergeevna Naumenko, Deputy Head of the and risk monitoring; additional payment for each audit of the Company's financial and Operations Supply (Energotorg). Department of Corporate Control in the Department for • ensuring the achievement of a high level of returns on the business activities; the amount of such payment equals up to Property Management and Corporate Relations of OJSC Company's assets and maximum return on the Company's twenty minimum monthly wages of a first labour grade worker. Part of the functions which were previously performed by the Gazprom. operations. subsidiaries undergoing the liquidation will be transferred to Members of the Audit Commission are reimbursed for their other subsidiaries and the executive administration of OJSC Executive Board Remuneration travelling expenses related to their participation in meetings Mosenergo, several other functions will be outsourced to of the Audit Commissions related to inspections, according to specialised contractor organisations according to modern Executive Bodies According to the Company's Charter and the decision of the regulations in force at the moment of such meetings or such principles of business process organisation. General Meeting of Shareholders, members of the Company's inspections. Management of OJSC Mosenergo's current operations is BoD are entitled to remuneration and/or compensation of In order to cut down minor operations and to optimise repairs carried out by a single executive body: General Director and a expenses incurred while performing their functions as on the The amount of remuneration paid to the Chairman of the Audit and servicing of the production process, the BoD of OJSC collegiate body, the Executive Board. Company's BoD during their membership. The amount of such Commission had been raised by 50%. Mosenergo resolved to create a 100%-owned subsidiary, remunerations and compensations is determined by a decision namely the Central Repairs and Mechanical Plant, Ltd. (CRMP, General Director is elected by the Board of Directors. Members of the General Meeting of Shareholders. The total amount of remuneration, allowances and compensation Ltd.) The public registration of CRMP, Ltd. took place on of the Executive Board are elected by the BoD; the number of paid to members of the Company's Audit Commission in 2008 November 23, 2009. 34 members is also determined by the BoD. Amount, type and procedure for payment of remuneration and reached 382,157 roubles. 35 the Moscow region, namely Kashirskaya TPP (now TPP- and thermal load with a developed infrastructure. infrastructure on the wholesale market and its correlation with Additional Information 4), Shaturskaya TPP (now TPP-5), Krasnopresnenskaya • On November 22, 2007 less than two years since the start of the retail market, as well as maintaining energy security of the TPP (now a subsidiary of TPP-12), TPP-6 and TPP-8. One construction, TPP-27 launched a steam-gas power unit with RF, unity of the market space, freedom of economic activities of the key events of the period was the completion of the a total capacity of 450 MW and heating capacity of 300 Gcal. and competition on the wholesale and retail markets. It is also Russia's first 110 kW voltage power line between Kashira In June 2008, a unit of the same type was put into operation responsible for maintaining the balance between interests of and Moscow, as well as two-circuit ring of power lines and on TPP-21, and in December of the same year the Company power-generating companies and buyers of electricity and electric power substations around Moscow with the voltage installed yet another 450 MW steam-gas power unit on TPP- capacity, as well as satisfying public demand for reliable and of 115 kW. The installation of the power ring gave Moscow a 27. uninterrupted supply of electricity; Mosenergo's History reliable power supply system. • Currently, OJSC Mosenergo is constructing a fourth 420 MW • In 1930s workers of the Moscow power supply system steam-gas power unit on TPP-26. French Alstom was hired OJSC The Administrator of the Trading System organises Mosenergo's history is closely connected to the history of the known until 1932 as MOGES (Unified Management of as a general contractor of the installation. trading on the wholesale electricity and capacity market development of Russia's economy, society and culture. Power Stations of the Moscow Region), started operations (registration of bilateral agreements, organisation of the system • The Joint Stock Company of Electric Lighting was dedicated to centralised district heating of the metropolis. The Structure of the Power Industry in Russia for collecting information about actual output and consumption Section p. founded in 1886 by Carl Fyodorovich Siemens, a Saint- March 1931 saw the launch of the first heating main of electricity and capacity on the wholesale market, as well Section p. OJSC 'Mosenergo' Today 8. Petersburg merchant of the First Guild, who was the Head pipe for hot water from MTTP-1 and the foundation of a After the completion of the structural reform of the Russian as forecasting electricity output and consumption volumes. OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. of the Siemens&Halske Representative Office. Although specialised enterprise for maintenance and development of power industry, control and supervision functions previously It is also responsible for maintenance of quality standards of Mosenergo Operations 14. Analysis of Financial Performance 24. the Company was founded in Saint-Petersburg, the new the Moscow heat network. carried our primarily by OJSC RAO UES of Russia were electricity specified in technical regulations, as well as ensuring Analysis of Financial Performance 24. Social Responsibility 26. enterprise's managing board raised a concern to prepare • The development of the power system was put on hold by transferred to the Government of the RF, public authorities and sustainability and safety of power supply; Social Responsibility 26.

Corporate Governance 32. ground for the company's operations in Moscow at its first the start of WWII. Part of the equipment was destroyed, industry infrastructural organisations. Corporate Governance 32.

Additional Information 36. meeting. some was evacuated and total capacity of Mosenergo sunk CJSC The Centre for Financial Settlements facilitates financial Additional Information 36. • On July 31, 1887 the managing board of the '1886 Society' two-fold. However, Moscow power engineers managed to At the governmental level, industry regulation is performed by settlements between participants on the wholesale market of approved the contract to set up electric lighting of the maintain continuous supply of power to the city's defence the Government Commission for the Development of Power electricity and capacity. Postnikova Passage on Tverskaya street in Moscow. This facilities; they constructed high-voltage obstacles for the Industry and the Government Commission for Safety of Power date is acknowledge as the founding date of the power enemy troops, assembled power-generating trains for the Supply. Mosenergo's Positioning in the Power Industry system in the Moscow region. freed regions of the country. Restoration of power industry • At the end of 1888 the company successfully completed the started right after the successful counter attack of the Soviet The key management body in the power industry is the Ministry OJSC Mosenergo is the largest of regional generating companies task to construct the first centralised power plant: electric troops in winter of 1941-1942. By 1945 Mosenergo had of Energy, which develops and implements public policy, as of the Russian Federation and a technologically integral part of the power was supplied by Georgievskaya power plant. On already achieved the pre-war capacity levels. well as norms and regulations in the energy industry. Unified Energy Systems of Russia. November 28, 1897 the company hosted a festive celebration • In 1946 Mosenergo started using a new type of fuel: HPS- for the opening of the Moscow Municipal Power Station 1 was transferred to natural gas firing. In the same year, On the competitive market control over the wholesale and Mosenergo's system includes 15 power stations with total capacity (MMPS) Raushskaya (now HPS-1), and on February 15, Moscow power system was connected to Ivanovo, Yaroslavl retail power markets in the field of complying with the anti- of 11.9 thousand MW and thermal capacity of 40.2 thousand MW 1907 the company launched the second station - MMPS-2 and Gorky power system and in 1956, the first link of the monopoly legislation is exercised by the Federal Antimonopoly (34.9 thousand Gcal/hour). Tramvaynaya. Unifies Power System of the European part of Russia was Service (FAS). FAS also controls the activities of the trading • In 1912, the company commenced the construction of the launched after the installation of a high-voltage power line administrator on the wholesale market of electricity, as well The Company generates 6.0% of electricity and 5.0% of heat world's first district power station operating on peat in from Kuybyshev to Moscow. as compliance to the disclosure of information standards by generated in the Russian Federation (including APS). the Bogorodsk district. In April of 1913 the new company, • Within the framework of the Unified Power System in 1960, subjects of the wholesale and retail market of electricity. Joint Stock Moscow Society Elektroperedacha was founded the country brought into operation first units of TPP-22, OJSC Mosenergo is the major generating company for electricity to utilise the capacity generated by the new station. The and for the first time in the USRR a 1000 mm heat pipeline Within the regulated sphere, tariffs and supervision of issues and heat in the Moscow region, which unites two subjects of the station itself started operating in 1914, and in 1915 it was was installed at TPP-22. On October 22, 1963 Mosenergo related to tariff-setting in the power industry are controlled by RF: the city of Moscow and the Moscow region. transferred to work in parallel with the Raushskaya station. launched TPP-21 shortly followed by TPP-23, TPP-25 and the Federal Tariff Service (FTS). • Joint stock companies of the Electric Lighting 1886 Society TPP-26. OJSC Mosenergo supplies around 66% of electricity and 42% heat and Elektroperedacha successfully operated until October • In 1970s Mosenergo successfully mastered a 250 MW The major functions of infrastructure organisations are: consumed in the Moscow region. 1917. After the October Revolution the stations were thermal power generating unit with supercritical steam nationalised and ceased operations under their previous performance. The unit was first installed on TPP-22 and OJSC The System Operator of UES ensured reliable functioning Electricity consumption analysis for 2009 shows a decline in ownership in December 1917. became a baseline unit for other thermal stations: TPP-21, of UES of Russia in real time, as well as long-term. It also electricity consumption both in the RF and the Moscow region. The • The management of state power stations was delegated to 23, 25 and 26. safeguards technological unity and efficient operation of the 2009 consumption in UES Centre, as compared to 2008, dropped by the Power Department of the Supreme Council of Public • On December 30, 1987 Mosenergo brought into operation wholesale and retail electricity and capacity markets; 5.7% (according to SO UES); the consumption in the Moscow Region Property. At the same time, in December 1917, Ivan Ivanovich the first hydroelectric generating set of the Zagorsk (Moscow City and the Moscow Region) declined by 4% as compared Radchenko and Alexander Vasilievich Vinter developed and Hydroelectric Power Station (ZaHEPS) - a unique power OJSC Federal Network Company of UES of Russia supplies to 2008 (according to the SO UES branch of Moscow LDO), while there suggested proposals for further development of Moscow unit regulating peak loads in the power system. In 1990 electricity transmission services and maintains operating was a significant increase in net balance shifting from UES Centre. power industry. These proposals became the basis for the Moscow Power System absorbed TPP-24, and in conditions of the electricity networks, as well as enforces Among power plants of the Moscow region which influence first State Plan for the Electrification of the whole country, 1992 it acquired TPP-28 in Moscow. technical control over the state of network units; operating regimess and pricing in the delivery points cluster for GOELRO. • In 1993, the production association Mosenergo was generation, the major existing and would-be competitors of the • In December 1920, the GOELRO plan was ratified by the VIII transformed into an open joint stock company. OJSC MRSK Holding manages distribution networking complex Company on the WMEC are Kashirskaya TPP-4 (OJSC WGC-1), All-Russia Soviet Council. According to the plan, the volume • In 2005 OJSC Mosenergo developed and started the and determines its development strategy; Shaturskaya TPP-5 (OJSC WGC-5) and Zagorskaya APS (OJSC of capacity of the Moscow power system should have implementation of the Programme for Development and RusHydro). quadrupled in 10 to 15 years. Total capacity should have Technical Upgrade. The programme envisaged installation of Independent Enterprise the Market Council on Efficient increased from 93 to 340 thousand kW. capacities on existing power stations located in regions with Operations of the Wholesale and Retail Trading Systems for Consumption of heat in the Moscow region in 2009 went up by 36 • Following the GOELRO plan, several stations were built in power shortages, as well as in centres of the most electric Electricity and Capacity ensures functioning of commercial 4.2%. OJSC Mosenergo being the largest supplier of hot water and 37 steam has a 68% share on the Moscow supply market, which is monitoring of prices on the wholesale market. If the required Risks of Unforeseen Fluctuations interpretations of legal norms which allow for ambiguous the most promising and fastest-growing market in Russia. price growth rate is exceeded, the wholesale market might of Currency and Interest Rates interpretation. follow a special pricing procedure, including enforcement of The major competitor of Mosenergo in generation and sales of public price regulation, which might result in a considerable The Company is subject to currency risks due to contracts In order to mitigate tax risks, the Company exercises heat is OJSC Moscow Unified Energy Company (OJSC MOEK). downturn in the Company's revenue and losses from sales of signed with Siemens and Alstrom for the supply of power regular monitoring of changes in tax legislation, judicial and electricity and capacity. units; the risk is possible because said contracts are nominated administrative practice in order to bring the applied method of Risks • The risk of containment of prices for capacity sold on the in Euro. Part of the currency risk was transferred to loans tax calculation in line with the legislation. The Company also wholesale electricity market starting form 2011(the draft required to refinance import contracts, attracted from such evaluates planned transactions from the point of view of tax Risk management implies prevention of risks in production and Regulations on the Long-Term Capacity Market envisage a banks as Calyon, NordLB, and BNP Paribas. As of January 1, risk mitigation, as well as organises advanced training of staff financial activities of OJSC Mosenergo, as well as minimising possibility of such a containment). 2010 the liabilities under these loan agreements amounted to responsible for the calculation and payment of taxes. possible negative outcomes of such risks. 75.6 mn Euro. In order to avoid the mentioned risks, OJSC Mosenergo takes Risks of Loss of Assets Due The Company implemented The Regulations on Risk Management part in the development of the normative base of the wholesale Since interest rate of loan agreements with Calyon, NordLB, to Damage of Property Section p. in OJSC Mosenergo. These Regulations contain a Map of Risks, electricity market, as well as monitors actual regional regimes and BNP Paribas is pegged to the EURIBOR6M rate, there is a Section p. OJSC 'Mosenergo' Today 8. which includes major types of risks that have an impact on and the UES and analyses actions of the OJSC SO UES. risk of increase of this interest rate. These risks include risks of decommissioning of power units and OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. Mosenergo's activities, as well as a risk management programme. property damage risks, which occurred as a result of terrorist Mosenergo Operations 14. Analysis of Financial Performance 24. Risks on the Heat Market At present, the Company is enforcing measures to hedge activity, embezzlements and natural disasters in the region. Analysis of Financial Performance 24. Social Responsibility 26. Risk management is based on a system approach, which implies: currency and interest rate risks, as well as planning the budget Social Responsibility 26.

Corporate Governance 32. • risk analysis; • Seasonal fluctuations in demand for heat, correlation of with a view of a possibility of currency and interest rate growth. In order to mitigate these risks, the Company organises regular Corporate Governance 32.

Additional Information 36. • and risk response. demand to climatic conditions; inspections of anti terrorist protection of staff and production, Additional Information 36. Risk management is carried out within the Company by functional • Lack of normative and legislative regulations on heat supply; Liquidity Risk enforces protection of possible after-effects of accidents, divisions according to the type of activities. • Redistribution of Mosenergo's hare on the retail market disasters and natural disasters and catastrophes, as well as At present, the Company believes that the following risks are the in favour of OJSC MOEK and OJSC Moscow Heat Network Currently, liquidity risk is insignificant. The liquidity cushion provides accident prevention and fire safety training and signs most substantial: Company - these companies are controlled by the Moscow with closing account balance exceeding 3.5 bn roubles, as well insurance agreements. Government and are active in connecting the heat load under as unused bank lines of over 13 bn roubles are sufficient for the Political Risks new construction projects. Company to meet its obligations in 2010 without the need to Risks of Civil Liability refinance new loans. The risk of unreasonable state regulation of tariffs, related to In order to mitigate these risks, OJSC Mosenergo is taking the This type of risks includes the risk of liability for polluting a possibility of artificial containment or directive lowering of following measures: Credit Risks the environment in the region, damaging property owned by tariffs, or approval of tariffs which are inadequate in terms of • reforming Teplosbyt in order to achieve competitive third parties, liability for the quality of goods supplied to the the Company's costs. advantages; When working with consumers, OJSC Mosenergo follows the domestic market and to the wholesale market of electricity, • taking an active part in the development of the Law on Heat practice of personal approach, which takes into account the as well as risks of the management's liability for the damage The Company's experts maintain constant cooperation with the Supply. specifics of financial and business activities of each consumer. caused to life and health of the Company's employees. FTS of Russia, Regional Energy Complex of Moscow and Fuel and Energy Committee of the Moscow Region. The purpose of Inflation risk might result in the growth of Mosenergo's costs During the credit risk monitoring business partners are grouped In order to mitigate these risks the Company focuses on: this cooperation is to ensure the approval of a reasonable level and a decrease in profits. Inflation growth might also result in according to their credit profiles, industry affiliation, and loan • decreasing emissions; of tariffs. losses in real terms of the Company's accounts receivable in structure by date and contractual terms of loan repayment. • continuously maintaining the equipment in operational case of deferred or delayed payments. regime required to sustain the load, as well as creating Furthermore, in order to lower this particular risk, the Company In order to manage credit risks, the Company is setting up capacity reserves; implements projects to help bring down its operational costs, The effects of inflation on the Company's financial stability a valuation reserve for the depreciation of receivables, files • developing automated system for commercial accounting of such as the Lean Production Project. are accounted for at the time of developing of the Company's claims and lawsuits and uses baking guarantees for repayment power; financial plans. In order to mitigate inflation risks, OJSC of advances. • certifying work places and technical equipment of working Market Risks Mosenergo signs long-term fixed annual price contracts for teams, as well as equipping work placed and working teams supply and transportation of gas to its power plants. Tax Risks with the means for individual and collective protection; Significant risks related to operations on the wholesale market • performing integrated measures to guarantee industrial of electricity: Risks of Unforeseen Fluctuations in Fuel Cost The Management believes that the Company fully abides by safety of dangerous production units of the Company; • unstable market prices and seasonal fluctuations in demand the taxation law regulating its activities. However, there is • insuring the risks. for electricity and heat; The cost of fuel might fluctuate quite substantially. Such a potential risk of difference of opinion with corresponding • lack of governmental regulations on long-term market of capacity situation when the cost of fuel in the business plan might be supervision authorities regarding issues which allow for Corporate Governance Risks and the pricing mechanism for new capacity starting from 2011; exceeded leading to the allocation of additional funding for ambiguous interpretation. • governing influence of OJSC SO UES on operation regime the fuel supply, might become possible. Current risks related to the Company's corporate governance are: of Mosenergo's power plants, which leads to transfer of Taxation law of the RF is subject to frequent changes • the risk of shareholders' court appeals of decisions made by the equipment to cold reserve or to surplus capacity. In order to minimise such risks, the Company's power plants and sometimes contains ambiguities and uncertainties. General Meeting of Shareholders and/or the Board of Directors; • The risk of introduction of a special price calculation for create reserve supply of fuel (coal and fuel oil), which will Consequentially, there is a possibility of tax risks related to: • the risk of the Company's executive bodies objecting to the electricity on the wholesale market, including a transition to ensure possible extra firing and eliminate single-stage • amendments to legislation on taxes and duties related to an decisions regarding the Company's transactions procedures public regulation of prices. In order to prevent a substantial purchases of large quantities of fuel. The Company also increase of tax rates; envisaged in the current legislations and consequentially, increase in electricity prices for end consumer, authorised cooperates with OJSC Gazprom to ensure signing of mutually • introduction of new taxes; declaring such transactions invalid following lawsuits of infrastructural organisations enforce a continuous beneficial contracts. • incorrect calculation and payment of taxes due to different interested parties; 38 39 • risks related to information disclosure procedures of the implementation of the Lean Production Project and activities Mosenergo's shares are listed on Russian MICEX (in quotation USD. To increase the pool of investors who have a right to Company, according to legislative requirements of the RF. related to study, analysis and enhancement of business list A1) and RTS (in quotation list A2) stock exchanges. acquire ADR issued for Mosenergo's shares and to build on processes. liquidity of the Company's shares, the Company shifted from In order to minimise these risks, the Company enforces a strict Tickers: private placement under Rule 144-A and Regulation S to Level division of responsibilities of the Company's managing bodies In order to improve the quality of decisions the Company • MICEX – MSNG 1 ADR programme in July of 1997. (in compliance with the Charter). The Company facilitates work offers training to the management and specialists in advanced • RTS T+0 – MSNGG of the BoD's committees, improvement of management of the training facilities. • RTS Classica – MSNG In the framework of the re-organization of RAO UES of organisation and introduction of amendments to documents • Bloomberg – MSNG RU Russia carried out in July 2008 the Company implemented a regulating corporate governance. The Company's divisions Investment Risks • Reuters – MSNG.RTS programme of global depositary receipts (GDR) in accordance perform continuous monitoring of compliance to legislative with Rule 144-A and Regulation S. requirements and constituent documents during all business While implementing its investment program Mosenergo is In October 1995 Mosenergo was the first Russian company to processes, as well as enforcement of the decisions made by the exposed to investment risks, i.e. risks associated with KPI launch an ADR programme for the Company's shares. ADR for Depository Receipts Programmes: Company's executive bodies. deterioration related to any ongoing projects as a result of the Company's shares were placed in October 1995 as through • 144А Section p. changed external factors. private placement according to Rule 144-A and Regulation S. • Reg S Section p. OJSC 'Mosenergo' Today 8. Technical and Production Risks As a result of the placement the Company attracted 22,500,000 • Level 1 OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. The Company is engaged in investment management Mosenergo Operations 14. Analysis of Financial Performance 24. The Company implements mitigation of technical risks related optimisation for new construction projects through introducing Analysis of Financial Performance 24. Social Responsibility 26. to production through creating reserves of fuel, spare parts project management systems based on the latest methods and Social Responsibility 26.

Corporate Governance 32. and materials, as well as implementing activities aimed at investment controlling practices. Corporate Governance 32. increasing safety of the power system. Additional Information 36. Mosenergo 2009 Market Capitalisation Dynamics, Bn, roubles Additional Information 36. The mitigation of investment risks in 2008 was also achieved The Company's power plants may face a risk of equipment through insurance mechanisms. failures due to misoperations of staff both in normal and in emergency operation. Legal Risks

Advanced staff training is offered in the Company's educational Risks of losses associated either with disregard of existing centres and directly on its TPPs. legislation or with legislative amendments introduced while a transaction was carried out; a risk of improperly drawn up Risks related to bringing into operation of new equipment are documentation. mitigated through purchasing of equipment that was made according to the technologies of manufacturers who have Legal risk management is based on formalised guidelines solid reputation on the market for such equipment and who for documents handling associated with day-to-day business have confirmed their technical and business indicators during activities of the Company. Minimisation of legal risks is guarantee tests and operation in the trial period. underpinned by the use of standard forms of documents and continuous monitoring of changes in the relevant legislation. The mitigation of risks related to shortages of qualified personnel required to operate the equipment is carried out by Documents supporting business processes in the Company are securing staff of the Company's subsidiaries through career subject to verification by the legal department, which facilitates January April June September December 2009 2009 2009 2009 2009 planning, monetary incentives and offer of social guarantees. minimisation of legal risks and risks associated with improperly drawn up documentation. Risks of increased expenses due to OJSC Mosenergo performs analysis of possible risk situations settlements of claims lodged against Mosenergo regarding Mosenergo RGC-1 RGC-9 RGC-4 while implementing its production programme. The key liabilities incurred prior to the reform. organisational instrument for risk mitigation and reimbursement of damages is insurance. The Company insures property, On December 31, 2008 Mosenergo terminated the agreement dangerous production units, transport, civil liabilities; we also on shared responsibility regarding liabilities incurred prior to provide insurance coverage of staff injuries, deceases, as well the reforms. This will facilitate the mitigation of such risks. Mosenergo's stock bonds listed on MICEX Stock Exchange. as general medical insurance. Passport Date of Issue Face Value Securities Identification Number Bond Description Quantity Maturity Term Organisational Risks Series Registration (roubles) December 1, Mosenergo's registered capital amounts to 39,749,359,700 BO-01 4В02-01-65116-D 1,000 1,000,000 1 year Organisational risks include the risk of losses resulting from roubles and it is divided between 39,749,359,700 common 2008 stock bearer bonds with imperfect management procedures in the Company and registered uncertified shares with the face value of 1 (one) December 1, BO-02 4В02-02-65116-D mandatory centralised 1,000 2,000,000 1 year incorrect selection of the market strategy. rouble each. 2008 custody December 1, BO-03 4В02-03-65116-D 1,000 2,000,000 1 year In order to minimise these risks the Company facilitates The issue of traded securities was registered on July 17, 2003; 2008 improvement of the management structure. This involves the the issue state registration number is 1-01-00085-A.

40 41 Information about the Members of the Board of Directors, Igor Vyacheslavovich Ignatov Date of Birth: 1968 BoD's Committees and the Executive Board Education: higher Members of the Board of Directors14 Positions held in the last 5 years and current positions Period Name of the Organisation Position Kirill Gennadievich Seleznev from to Date of Birth: 1974 2004 to date Property Department of the Deputy Head of Department Education: higher Government of Moscow Positions held in the last 5 years and current positions Period Name of the Organisation Position from to Alexey Alexandrovitch Mityushov Date of Birth: 1975 2002 to date OJSC 'Gazprom' Head of the Department of Gas and Liquid Hydrocarbons Processing and Education: higher Marketing, member of the Executive Board Section p. Positions held in the last 5 years and current positions Section p. OJSC 'Mosenergo' Today 8. 2003 to date Mezhregiongas, ltd. CEO (second employment) OJSC 'Mosenergo' Today 8. Period Mosenergo Operations 14. Name of the Organisation Position Mosenergo Operations 14. from to Analysis of Financial Performance 24. Pyotr Pavlovich Biryukov Analysis of Financial Performance 24. 2003 2007 Mezhregiongas, ltd. Head of Property and Corporate Affairs Department Social Responsibility 26. Date of Birth: 1951 Social Responsibility 26.

Corporate Governance 32. Education: higher Corporate Governance 32. Additional Information 36. Positions held in the last 5 years and current positions 2003 2007 Mezhregionteplo, ltd. CEO Additional Information 36. Period Name of the Organisation Position from to 2007 to date Gazpromenergo, ltd. CEO 2002 2007 Prefecture of the Southern Ad- Prefect ministrative District of Moscow 2007 to date Moscow Government first deputy Mayor of Moscow in the Moscow Government, head of the 2008 to date OJSC The Sixth Wholesale CEO Municipal Economy Complex of Moscow Generating Company

Anatoliy Anatolievich Gavrilenko Date of Birth: 1972 Olga Petrovna Pavlova Education: higher Date of Birth: 1953 Positions held in the last 5 years and current positions Education: higher, PhD in Law Period Positions held in the last 5 years and current positions Name of the Organisation Position from to to date CJSC 'Leader' CEO Period 2002 Name of the Organisation Position from to Valeriy Alexandrovich Golubev 2004 to date OJSC 'Gazprom' Head of the Department of Asset Management and Corporate Relations, Date of Birth: 1952 member of the Executive Board Education: higher, PhD in economy Positions held in the last 5 years and current positions Period Vladimir Nikolaevich Silkin Name of the Organisation Position from to Date of Birth: 1957 Education: higher, PhD in Technical Science 2003 2005 Gaskomplektimpeks, ltd. CEO Positions held in the last 5 years and current positions 2005 2006 OJSC 'Gazprom' Head of the Department of Investment and Construction, member of the Period Executive Board Name of the Organisation Position 2005 2006 Gaskomplektimpeks, ltd. CEO (second employment) from to 2006 to date OJSC 'Gazprom' Deputy Chairman of the Executive Board 1992 2004 Prefecture of the North-East Ad- First Deputy Prefect ministrative District of Moscow Alexander Pavlovich Dushko Date of Birth: 1964 2004 2007 Government of Moscow, Minister of the Government of Moscow, Head of the Department Education: higher, PhD in economy Property Department of the Positions held in the last 5 years and current positions Government of Moscow Period Name of the Organisation Position 2007 to date Government of Moscow, Deputy Moscow Mayor in the Government of Moscow, Head of the Unit from to Property Department of the for Property and Land Affairs of Moscow, Head of the Property Depart- 2004 to date OJSC 'Gazprom' Deputy Head of the Finance and Economics Department Government of Moscow ment of the Government of Moscow 2008 to date Gazprom Power Holding, ltd. Financial Director 42 43 14 elected at the General Meeting of Shareholders on June 30, 2009 Evgeniy Viktorovich Sklyarov Audit Committee Alexander Sergeevich Ivannikov, Deputy General Director for Date of Birth: 1955 Members of the Audit Committee approved by the Resolution Financial Issues and Budgeting, OJSC Mosenergo; Education: higher, PhD in economy of the Board of Directors dated August 21, 2009, Minutes 3. Positions held in the last 5 years and current positions Alexander Vladimirovich Ilienko, Director for Technological Period Chairman of the Committee: Development of Dispatch Management, OJSC SO UES; Name of the Organisation Position Olga Petrovna Pavlova, member of the Executive Board of OJSC from to Gazprom, head of the Department for Asset Management and Irina Yurievna Korobkina, Head of the Department for Support 2003 2006 OJSC Mospormstroymaterialy President Corporate Relations of OJSC Gazprom, member of the BoD of of the Reform in the Electricity and Power Sector of the 2006 to date Government of Moscow, Head of the Department OJSC Mosenergo. Administration for the Development of Electricity and Power Department for Fuel and Power Sector and Marketing in the Power Industry, OJSC Gazprom; Industry Members of the Committee: Anatoliy Anatolievich Gavrilenko, CEO of CJSC Leader, member Anatoliy Pavlovich Kuleshov, First Deputy of the Head of the Denis Vladimirovich Fyodorov of the BoD of OJSC Mosenergo. Department for Fuel and Power Industry of Moscow; Section p. Date of Birth: 1978 Section p. OJSC 'Mosenergo' Today 8. Education: higher, PhD in economy Alexander Pavlovich Dushko, Deputy Head of the Finance and Alexander Vladimirovich Rogov, Deputy Head of the OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. Positions held in the last 5 years and current positions Economics Department of OJSC Gazprom, member of the BoD Department for Development of Electricity and Power Sector Mosenergo Operations 14. Analysis of Financial Performance 24. Period of OJSC Mosenergo; of the Administration for Development of Electricity and Power Analysis of Financial Performance 24. Social Responsibility 26. Name of the Organisation Position Sector and Marketing in the Power Industry, OJSC Gazprom; Social Responsibility 26. from to Corporate Governance 32. Vladimir Nikolaevich Silkin, Deputy Moscow Mayor in the Corporate Governance 32. 2002 2006 EvroSibEnergo-Engineering, ltd. 1st Grade Specialist, Head of the Department Additional Information 36. Government of Moscow, Head of the Unit for Property and Dmitriy Yurievich Tushunov, Head of the Analytical Department, Additional Information 36. Land Affairs of Moscow, Head of the Property Department Chief Economist of CJSC Leader; 2006 2007 Gaznergoprom Corporation, ltd. Head of the Department for Investment Technologies and Technological of the Government of Moscow, member of the BoD of OJSC Projects Mosenergo. Pavel Olegovich Shatskiy, First Deputy CEO of Gazprom 2006 2007 Mezhregiongas, ltd. Adviser to the CEO Energoholding, ltd; Nikolay Grigorievich Shulginov, First Deputy Chairman of the 2006 2008 Mezhregionsbyt, ltd. CEO OJSC SO UES Executive Board, member of the BoD of OJSC Members approved by the Resolution of the BoD dated June 9, Mosenergo. 2008, Minutes 1 and September 01, 2008, Minutes 5. 2007 to date OJSC 'Gazprom' Head of the Department for the Development of Electricity and Power Sector and Marketing in the Power Sector Former members of the BoD: Chairman – O.P. Pavlova; Chairman – D.V. Fyodorov; members: E.V. Andreeva, S.V. 2009 to date Gazprom Power Holding, ltd. CEO members: A.A. Gavrilenko, V.N. Silkin, D.V. Fyodorov and N.G. Antonova, V.A. Dyomina, M.K. Zavrieva, A.S. Ivannikov, I.V. Shulginov. Ignatov, A.V. Ilienko, S.R. Prokurov, A.V. Rogov, V.Y. Tulskiy, 2009 to date OJSC Centereenergoholding CEO D.Y. Tushunov. The Strategy and Development Committee Nikolay Grigorievich Shulginov HR and Remuneration Committee Date of Birth: 1951 Members of the Strategy and Investments Committee approved Education: higher, PhD in Technical Science by the Resolution of the BoD dated November 6, 2009, Minutes Members of the HR and Remuneration Committee approved by Positions held in the last 5 years and current positions 7: the Resolution of the Board of Directors dated August 21, 2009, Period Minutes 3. Name of the Organisation Position Chairman of the Committee: from to Denis Vladimirovich Fyodorov, Head of the Department for the Chairman of the Committee: 2004 2009 OJSC 'SO CDD UES' Deputy Chairman of the Executive Board Development of the Electricity and Power Sector and Marketing Anatoliy Anatolievich Gavrilenko, CEO of CJSC Leader, member 2009 to date OJSC The System Operator First Deputy Chairman of the Executive Board in the Power Industry of OJSC Gazprom, member of the BoD; of the BoD of OJSC Mosenergo. of the Unified Energy System (OJSC SO UES) Members of the Committee: Members of the Committee: Igor Vyacheslavovich Ignatov, Deputy Head of the Property Valeriy Alexandrovich Golubev, Deputy Chairman of the Vitaliy Georgievich Yakovlev Department of Moscow City, member of the BoD; Executive Board of OJSC Gazprom, member of the BoD of OJSC Date of Birth: 1972 Mosenergo. Education: higher Elena Viktorovna Andreeva, Deputy General Director of Sales, Positions held in the last 5 years and current positions OJSC Mosenergo; Alexander Pavlovich Dushko, Deputy Head of the Financial and Period Business Department of OJSC Gazprom, member of the BoD of Name of the Organisation Position Sergey Petrovich Anisimov, Head of the Economy and Tariff OJSC Mosenergo; from to Department of Gazprom Energoholding, ltd. 2004 2007 OJSC Vostokgazprom First Deputy Vice-President, President Former members of the BoD: Chairman - A.A. Gavrilenko; 2004 2007 OJSC Tomskgazprom CEO (second employment) Svetlana Vladimirovna Antonova, Deputy General Director for members: V.A. Golubev, Y.A. Udaltsov, D.V. Fyodorov. 2007 March 31, OJSC 'Mosenergo' Deputy General Director for Corporate Policy Legal Issues, OJSC Mosenergo; 2008 Safety Committee April 1, to date OJSC 'Mosenergo' General Director Denis Nikolaevich Bashuk, Head of the Production Department 2008 of Gazprom Energoholding, ltd; Members of the Safety Committee approved by the Resolution 44 45 of the BoD dated August 21, 2009, Minutes 3 and November 6, Gazprom Energoholding, ltd.; Svetlana Vladimirovna Antonova 2009, Minutes 7: Date of Birth: 1974 Vladimir Valentinovich Sergeev, First Deputy General Director, Education: higher Chairman of the Committee: Chief Engineer of OJSC Mosenergo; Positions held in the last 5 years and current positions Denis Vladimirovich Fyodorov, Head of the Department for the Period Development of the Electricity and Power Sector and Marketing Artur Mikhailovich Trinoga, Head of the Power Engineering Name of the Organisation Position from to in the Power Industry of OJSC Gazprom, member of the BoD; Department of the Administration for the Development of Electricity and Power Sector and Marketing in the Power 2004 2007 Kazakov and Partners Law Firm lawyer, partner Members of the Committee: Industry, OJSC Gazprom; 2007 to date OJSC 'Mosenergo' Deputy General Director for Legal Issues Igor Dmitrievich Alyushenko, Director for Technological Development of Dispatch Management, OJSC SO UES of the Sergey Anatolievich Tsarev, Deputy Head of Use and UDD Centre; Maintenance of the Power Technical Equipment, OJSC Dmitriy Alexandrovitch Barshak Mosenergo. Date of Birth: 1956 Section p. Mikhail Ivanovich Balabanov, First Deputy of the Head of the Education: higher, PhD in Technical Science Section p. OJSC 'Mosenergo' Today 8. Department for Fuel and Power Industry of Moscow; Former members of the BoD: Chairman - A.A. Gavrilenko; Positions held in the last 5 years and current positions OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. Mosenergo Operations 14. members: V.A. Golubev, Y.A. Udaltsov, D.V. Fyodorov. Period Analysis of Financial Performance 24. Denis Nikolaevich Bashuk, Head of the Production Department Name of the Organisation Position Analysis of Financial Performance 24. from to Social Responsibility 26. of Gazprom Energoholding, ltd; Members approved by the Resolution of the BoD dated June 9, Social Responsibility 26. 2001 2005 OJSC 'Mosenergo' Deputy Chief Engineer for Thermal Engineering Corporate Governance 32. 2008, Minutes 14 and August 14, 2008, Minutes 4. Corporate Governance 32.

Additional Information 36. Sergey Alexandrovich Pronin, Director for Technical Audit, 2005 2008 OJSC 'Mosenergo' Director for Thermal Engineering Additional Information 36. OJSC Mosenergo; Chairman - V.V. Sergeev; members: I.D. Alyushenko, I.V. 2008 to date TPP-21, a subsidiary of OJSC Director Belousenko, G.G. Gasangadzhiev, B.P. Modin, S.A. Pronin, Mosenergo Nikolay Dmitrievich Rogalyov, Deputy CEO for Development, A.Y. Putenikhin, A.M. Trinoga, S.A. Tsarev.

Ivan Vasilievich Galas Members of the Executive Board15 Date of Birth: 1955 Education: higher, PhD in Technical Science Positions held in the last 5 years and current positions Vitaliy Georgievich Yakovlev Period (Chairman) Name of the Organisation Position from to Date of Birth: 1972 Education: higher 2005 2008 TPP-23, a subsidiary of OJSC Chief Engineer Positions held in the last 5 years and current positions Mosenergo 2008 to date TPP-20, a subsidiary of OJSC Director Period Name of the Organisation Position Mosenergo from to 2004 2007 OJSC Vostokgazprom First Deputy Vice-President, President Artyom Igorevich Dmitriev 2004 2007 OJSC Tomskgazprom CEO (second employment) Date of Birth: 1979 2007 March 31, 2008 OJSC 'Mosenergo' Deputy General Director for Corporate Policy Education: higher Positions held in the last 5 years and current positions April 1, to date OJSC 'Mosenergo' General Director Period 2008 Name of the Organisation Position from to Elena Viktorovna Andreeva Date of Birth: 1974 2005 2005 Gazflot, ltd. Deputy Head of the Department Education: higher 2005 2008 CJSC Sevmorneftegaz Head of the Department Positions held in the last 5 years and current positions 2008 2008 OJSC 'Mosenergo' Deputy Head of the Tender Committee Period Name of the Organisation Position 2009 to date OJSC 'Mosenergo' Deputy General Director for Procurement and Production Furnishing from to 2002 2005 OJSC SO CDD UES Chief Expert, Head of the Directorate for Finance and Economy, Head of Nikolay Alexeevich Zroychikov the Tariffication Department in the Directorate for Finance and Economy, Date of Birth: 1954 Head of the Legal Support Department, Head of the Department for Tariff Education: higher, PhD in Technical Science Regulation Positions held in the last 5 years and current positions 2005 2008 CJSC INTER RAO UES Chief Manager, Head of the Directorate of the Department for Sales on Period WMEC, Deputy Head of the Department for Sales on WMEC Name of the Organisation Position from to 2008 2008 OJSC 'Mosenergo' Director for WMEC Operations 2005 to date TPP-23, a subsidiary of OJSC Director 2008 to date OJSC 'Mosenergo' Deputy General Director for Sales Mosenergo

46 47 15 As of 31/12/2009 Alexander Sergeevitch Ivannikov Compliance with the Corporate Governance Code of the Federal Financial Markets Service Date of Birth: 1966 Education: higher, PhD in economy No. Provision of the Corporate Governance Code Complied/ Notes Positions held in the last 5 years and current positions Not Period Name of the Organisation Position Complied from to General Meeting of Shareholders 2001 2006 Committee for the Economic Head of the Department for Investment Policy Management, First Deputy 1. Not less than a 30-day prior notice of a General Partially Mosenergo's Charter, Article 17, paragraph 17.12. Development, Industrial Policy of the Chairman of the Committee, Head of the Unit for Defence Enter- Meeting shall be given to shareholders regardless Complied Notification of shareholders about a General and Trade of the Government of prises of the Industrial Policy Department of the issues on the agenda, unless legislation Meeting of Shareholders or about a General Meeting Saint Petersburg provides for a longer notice of Shareholders with the agenda of reorganisation 2006 2007 OJSC TGK-1 Deputy CEO for Economy and Finance of the Company is sent (or given) to each person 2007 2008 OJSC 'Mosenergo' Deputy General Director for Finance mentioned in the list or persons entitles to Section p. participate in the General Meeting of the Company's Section p. 2008 to date OJSC 'Mosenergo' Deputy General Director for Finance and Budgeting OJSC 'Mosenergo' Today 8. Shareholders; such notification shall be published OJSC 'Mosenergo' Today 8.

Mosenergo Operations 14. in Izvestia newspaper, as well as on the Company's Mosenergo Operations 14. Analysis of Financial Performance 24. Vladimir Valentinovich Sergeev web site not later than 30 (thirty) days prior to the Analysis of Financial Performance 24. Social Responsibility 26. Date of Birth: 1957 meeting. Notification about Special General Meeting Social Responsibility 26. of Shareholders shall be published not later than 20 Corporate Governance 32. Education: higher, PhD in Technical Science Corporate Governance 32. (twenty) days prior to the meeting. Additional Information 36. Positions held in the last 5 years and current positions Additional Information 36. 2. Access of the shareholders to the list of persons Complied According to the existing legislation, the list of Period Name of the Organisation Position entitled to attend the General Meeting, starting from persons authorised to participate in the Meeting from to the date of announcement of the General Meeting shall be made available by the Company at the 1996 2005 TPP-20, a subsidiary of OJSC Director until the closing of the General Meeting held in request of persons included in such list and having Mosenergo person, and in the case of a General Meeting held at least 1% of the votes. 2005 to date OJSC 'Mosenergo' First Deputy General Director, Chief Engineer by correspondence – until the deadline for the collection of voting ballots Vasiliy Yurievich Tulskiy 3. Access of the shareholders to information Complied Mosenergo's Charter, Article 17, paragraph 17.6. Date of Birth: 1978 (materials) to be provided during the preparation Education: higher for the General Meeting through electronic media, Positions held in the last 5 years and current positions including the Internet Period 4. Possibility for a shareholder to put an issue on the Complied The procedure for entering an item on the General Name of the Organisation Position from to agenda of the General Meeting or require a General Meeting agenda, as well as the procedure on Meeting to be called without presenting an extract holding a General Meeting of Shareholders shall be 2002 2005 CJSC KPMG Auditor, Chief Auditor of the Audit Department from the shareholder register where title to shares established by existing legislation. The Charter and 2005 2008 CJSC UPS Essies (CIS) Financial Manager of the Accounting Department, Chief Accountant is recorded in the shareholder register system, and by-laws of the Company do not envisage submitting 2008 to date OJSC 'Mosenergo' Investment Director by presenting only a statement from the deposit of a compulsory extract from the shareholders account where the title to shares is recorded in a registry or an extract from a depot account when deposit account entering an issue in the agenda or calling for a Anna Sergeevna Tsaregorodtseva meeting. Date of Birth: 1976 5. Presence in the Charter and internal documents Not Education: higher of the Company of the requirement on mandatory Complied Positions held in the last 5 years and current positions presence of CEO, members of the managing Period board, members of the BoD, members of the audit Name of the Organisation Position from to commission and the Company's auditor at the 2004 2006 Industrial Systems of Marten, Commercial Director General Meeting of Shareholders ltd. 6. Obligatory presence of the nominees for the positions Not Complied 2004 2006 CJSC European Real Estate Manager of the High-End Real Estate Department of members of the Board of Directors, the CEO, Trading System members of the Management Board, members of the Audit Commission and external auditor during 2006 2008 ANT-Inform, ltd. HR Manager, Head of HR Department consideration by the General Meeting of their election 2008 2008 OJSC 'Mosenergo' HR Management Director and appointment 2008 2009 OJSC 'Mosenergo' Deputy General Director for HR Management 7. The by-laws of the company establish a registration Complied The Regulations on the General Meeting of procedure for the participants at the General Shareholders of OJSC Mosenergo, Article 8, 2009 to date OJSC 'Mosenergo' Deputy General Director, Managing Director Meeting paragraph 8.7, Article 9, Paragraphs 9.1, 9.2.

48 49 Board of Directors 19. The by-laws of the company contain a responsibility Complied The Regulations on the BoD of OJSC Mosenergo, 8. The company’s Charter provides for the authority of Complied Mosenergo's Charter, Article 20, paragraph 20.1, of members of the BoD to give a written notice to Article 4., paragraph 4.3, sub paragraph 4.3.10. the Board of Directors to approve annual financial sub paragraph 62. Provision in the joint stock the BoD on their intention to make transactions with statements and operating plans company's charter of the authority of the Board the Company's securities. These members are also of Directors to approve annually a business plan members of the BoD or the Company's subsidiaries (adjusted business plan), including the programme (affiliated companies) and their responsibilities also for technical upgrade, reconstruction and include disclosure of information on their transactions development, as well as investment programme with such securities and performance reports. 20. The by-laws of the company contain a requirement Partially The Regulations on the BoD of OJSC Mosenergo, 9. The company has a risk management procedure Complied The Regulations on Risk Management of OJSC that a meeting of the Board of Directors should be Complied Article 8, paragraph 8.3. Meetings of the Board of approved by the Board of Directors Mosenergo is approved by the Company's Board of held at least once in six weeks Directors shall be held as required, but not less Directors; Minutes 9 dated November 18, 2004. often than once every quarter. 10. The company’s Charter provides for the right Complied Mosenergo's Charter, Article 20, paragraph 15.1, 21. Holding of Meetings of the Company's BoD in the Partially In 2009 Meetings of the Board of Directors were Section p. Section p. of the Board of Directors to make a decision on sub paragraph 24. course of a year, in which the Company's annual Complied held as required. During the reporting period, the OJSC 'Mosenergo' Today 8. OJSC 'Mosenergo' Today 8. suspending the authorities of the CEO appointed by report is prepared, but not later than once every six Company held 16 meetings of the BoD. 14. 14. Mosenergo Operations the General Meeting weeks Mosenergo Operations Analysis of Financial Performance 24. Analysis of Financial Performance 24. 11. The Charter of the company provides for the right of Partially Mosenergo's Charter, Article 25, paragraph 25.6. 22. The by-laws of the company establish a procedure Complied Mosenergo's Charter, Article 22, the Regulations of Social Responsibility 26. Social Responsibility 26. the Board of Directors to establish requirements for the Complied The agreement between the Company's CEO and for conducting meetings of the Board of Directors the BoD of OJSC Mosenergo, Articles 8 to 10. 32. 32. Corporate Governance qualifications and the level of compensation of the CEO, members of the Company's Executive Board and the 23. The by-laws of the company include a provision on Complied Mosenergo's Charter, Article 20, paragraph 20.1., Corporate Governance Additional Information 36. members of the Management Board, and managers of Company is signed by the Chairman of the BoD or by the need to have approval of the Board of Directors sub paragraph 49. Additional Information 36. the key structural divisions of the company a person authorised to do so by the Company's BoD. for the company’s transactions amounting to 10% 12. The company’s Charter provides for the right of Complied Mosenergo's Charter, Article 25, paragraph 25.6. and more of the company’s assets value, other than the Board of Directors to approve the terms of transactions performed in the ordinary course of the contracts with the CEO and members of the business Management Board 24. The by-laws of the company provide for the right of Complied The Regulations on the BoD of OJSC Mosenergo, 13. The Charter and by-laws of the company contain a Not the members of the Board of Directors to receive in- Article 4, paragraph 4.2., sub paragraph 4.2.1. requirement that votes of the members of the Board Complied formation necessary for the performance of their of Directors who act as the CEO and members of functions from the executive bodies and managers of the Management Board should not be taken into the key structural divisions, and liability of the latter for account when the terms of the contracts with the non-provision of such information CEO (managing entity, manager) and members of 25. There is a strategic planning committee of the Complied the Management Board are approved Board of Directors or functions of such committee 14. The Board of Directors includes at least 3 Complied are assigned to some other committee (other independent directors meeting the requirements of than the Audit Committee or the Nomination and the Code of Corporate Conduct Compensation Committee) 15. There are no persons on the Board of Directors Complied 26. There is a committee (Audit Committee) of the Complied convicted of committing offences in the sphere Board of Directors that recommends an external of economic activity; against the government, auditor to the Board of Directors and communicates against interests of the federal, regional and with the external auditor and the internal Audit local government service; or that have been Commission of the company subjected to administrative penalties for offences 27. The Audit Committee includes only independent and Complied in the sphere of entrepreneurial activities or in non-executive directors the sphere of finance, taxes and levies and the 28. The Audit Committee is chaired by an independent Complied securities market director 16. There are no persons on the Board of Directors who Not 29. The by-laws of the joint stock company provide Complied The Regulations on the Audit of the BoD of OJSC serve as members, the CEO (manager), members Complied for the access of all the members of the Audit Mosenergo, Article 3, Article 11. of the management body or employees of any Committee to any documents and information of the competitor of the company company subject to non-disclosure of confidential 17. The company’s Charter contains a requirement that Complied Mosenergo's Charter, Article 18, paragraph 18.1. information the Board of Directors be elected by cumulative vote 30. There is a committee (Nomination and Complied 18. The by-laws of the company include the obligation Partially Article 8, paragraph 8.1 of the Regulations on the Compensation Committee) of the Board of Directors of the members of the Board of Directors to refrain Complied Informational Policy of OJSC Mosenergo stipulates that is responsible for the determination of the from any actions that will or may potentially lead a requirement for members of the BoD to submit criteria for the selection of candidates to the Board to a conflict of interests with the company, and written notifications to the BoD about rise of a of Directors and development of the company’s in the case of such conflict – their obligation to conflict or a possibility of a rise of a conflict between compensation policies disclose information on such conflict to the Board their interests and the interests of the Company. 31. The Nomination and Compensation Committee is Complied of Directors headed by an independent director 50 51 32. There are no executives of the company in the Complied 44. The Charter or by-laws of the company contain a Partially Mosenergo's Charter, Article 26, paragraph 26.7/ Nomination and Compensation Committee prohibition for the managing entity (manager) to Complied The resolution to delegate responsibilities of the 33. There is a risk committee of the Board of Directors or Not The Committee was not organised. perform similar functions for a competitor or have Company's CEO to a managing organisation or functions of such committee are assigned to some Complied any other property relations with the company other a manager shall be made by a General Meeting other committee (other than the Audit Committee than the provision of management services of Shareholders acting on a proposal from the or the Nomination and Compensation Committee) Company's Board of Directors. The conditions of the 34. There is a committee for the settlement of corporate Not The Committee was not organised. contract shall be approved by the Company's Board conflicts of the Board of Directors or functions Complied of Directors. of such committee are assigned to some other 45. The by-laws of the company include the obligation Partially Regulations on the Informational Policy of OJSC committee (other than the Audit Committee or the of the members of the executive bodies to refrain Complied Mosenergo, Article 8, paragraph 8.1. Nomination and Compensation Committee) from any actions that will or may potentially lead to Members of the Executive Board, as well as the 35. There are no executives of the company in the Not The Committee was not organised. a conflict of interests with the company and in the Company's CEO shall be obliged to submit a written committee for the settlement of corporate conflicts Complied case of such conflict – their obligation to inform the notification to the Board of Directors about a rise of Section p. Board of Directors on such conflict conflict or a possibility of a rise of conflict between Section p. 36. The committee for the settlement of corporate Not The Committee was not organised. OJSC 'Mosenergo' Today 8. their interests and the interests of the Company. OJSC 'Mosenergo' Today 8. conflicts is headed by an independent director Complied Mosenergo Operations 14. The Regulations on the BoD of OJSC Mosenergo, Mosenergo Operations 14. 37. Analysis of Financial Performance 24. The company has internal by-laws approved by the Complied Article 4., paragraph 4.2. Analysis of Financial Performance 24. Board of Directors providing for the procedure of Social Responsibility 26. When exercising their rights or fulfilling their Social Responsibility 26. formation and operation of the committees of the Corporate Governance 32. obligations members of the Executive Board shall Corporate Governance 32. Board of Directors Additional Information 36. act pursue interests of the Company, exercise their Additional Information 36. 38. The company’s Charter provides for a procedure Partially Mosenergo's Charter, Article 22, paragraphs 22.9, rights and fulfil their obligations to the Company in to determine the quorum of the Board of Directors Complied 22.10. a reasonable and bona fide manner. that would ensure obligatory participation of 46. The Charter or by-laws of the company contain Partially Mosenergo's Charter, Article 26, paragraph 26.7. independent directors at the Board meetings criteria for the selection of the managing entity Complied The resolution to delegate responsibilities of the Executive Bodies (manager) Company's CEO to a managing organisation or 39. The company has a collective executive body Complied Mosenergo's Charter, Article 25, paragraph 25.1, a manager shall be made by a General Meeting (Management Board) Article 27. of Shareholders acting on a proposal from the 40. The Charter or by-laws of the company contain Complied The Company's Charter stipulates approval of Company's Board of Directors. The conditions of provisions on the need to have approval of the partially transactions in such cases that are determined the contract shall be approved by the Company's Management Board for real estate transactions by the Board of Directors and/or the Company's Board of Directors. and loans received by the company unless such Executive Board. 47. Executive bodies provide monthly reports on their Partially Mosenergo's Charter, Article 20, paragraph 20.1., transactions are major deals or are performed in the Mosenergo's Charter, Article 20, paragraph 20.1., activities to the Board of Directors Complied sub paragraph 25. ordinary course of business sub paragraphs 49, 50, 55, Article 27, paragraph 48. The contracts made by the company with the CEO Complied 27.4., sub paragraphs 7, 9. (managing entity, manager) and members of the 41. The by-laws of the company establish procedures for Complied Management Board stipulate liability for violation of the approval of transactions which are outside the the provisions on the use of confidential and insider scope of the company’s financial and operational plan information Secretary of the Company 42. There are no persons in the executive bodies who Complied 49. There is a special official in the company (company Complied Mosenergo's Charter, Article 20, paragraph 20.1., sub serve as members, the CEO (manager), members Secretary) whose function is to ensure that the company’s paragraphs 13, Article 24. of the management body or employees of any bodies and officials comply with procedural requirements The Regulations on the BoD of OJSC Mosenergo, Article competitor of the company guaranteeing the exercise of the legal rights and interests 7. 43. There are no persons in the management bodies Complied of the company’s shareholders convicted of committing offences in the sphere 50. The Charter or by-laws of the company prescribe Complied Mosenergo's Charter, Article 20, paragraph 20.1., sub of economic activity; against the government, a procedure for the appointment (election) of the paragraphs 13, Article 24. against interests of the federal, regional and local company Secretary and responsibilities of the The Regulations on the BoD of OJSC Mosenergo, Article government service; or that have been subjected to company Secretary 7. administrative penalties for offences in the sphere 51. The company’s Charter contains requirements Partially Mosenergo's Charter, Article 20, paragraph 20.1., of entrepreneurial activities or in the sphere of to the candidate for the position of the company Complied sub paragraph 13. finance, taxes and levies and the securities market. Secretary The Regulations on the BoD of OJSC Mosenergo, If the functions of the sole executive body are Article 7., paragraph 7.2. performed by a managing entity or a manager – the Major Corporate Actions CEO and members of the Management Board of the 52. The Charter or by-laws of the company contain a Complied Mosenergo's Charter, Article 15, paragraph 15.1., managing entity or manager meet the requirements requirement on approval of any major deal before sub paragraph 17, Article 20, paragraph 20.1., sub established for the CEO and members of the it is concluded paragraph 48. Management Board of the company

52 53 53. Obligatory engagement of an independent appraiser Complied Mosenergo's Charter, Article 20, paragraph 20.1., 63. The by-laws of the company contain a requirement Complied Mosenergo's Charter, Article 32, paragraph 32.4. to determine the market value of any property that is sub paragraphs 36, 48. to disclose information on all transactions that may Mosenergo's Regulations on Informational Policy, subject to major transactions. affect the market value of the company’s shares. Article 4, paragraph 4.1 (g), sub paragraphs 4.4.4, 54. In the event of acquisition of any large stakes in the Not 4.4.5 (zh, z), paragraph 4.4.8 and 4.4.19. company (takeover), the Charter of the company Complied 64. There is an internal document approved by the Board Complied Mosenergo's Informational Policy was approved by prohibits taking any actions aimed at the protection of Directors on the use of significant information the BoD on 01/11/2004, Minutes 8. of interests of the executive bodies (members of on the activity, shares and other securities of the Mosenergo's Insider Information Policy was such bodies) and members of the Board of Directors, company and transactions with such shares and approved by the BoD on 21/10/2005, Minutes 9. and also such actions that make the position of other securities, which is not publicly available and shareholders worse than their current position (in the disclosure of which may have material impact particular, prohibition of a decision by the Board on the market value of shares and other securities of Directors to issue additional shares, securities of the company. convertible into shares or securities granting right to Control of Financial and Business Operations Section p. Section p. acquire shares in the company before the end of the 65. There are internal control procedures over the Complied Mosenergo's Internal Control Regulations was OJSC 'Mosenergo' Today 8. OJSC 'Mosenergo' Today 8. expected time of the acquisition of shares, even if the financial and operational activities of the company approved by the BoD on 05/09/2005, Minutes 7, 14. 14. Mosenergo Operations right to take such decision is granted by the Charter). approved by the Board of Directors. Article 5. Mosenergo Operations Analysis of Financial Performance 24. Analysis of Financial Performance 24. 55. The company’s Charter contains a requirement on Complied Mosenergo's Charter. Article 20, paragraph 20.1, 66. There is a special division in the company ensuring Complied Social Responsibility 26. obligatory engagement of an independent appraiser sub paragraph 36. compliance with the internal control procedures Social Responsibility 26. Corporate Governance 32. to determine the current market value of shares and (internal control service). Corporate Governance 32. Additional Information 36. potential changes in their market value as a result Additional Information 36. 67. The by-laws of the company contain a requirement Partially Mosenergo's Internal Control Regulations was of takeover. that the structure and members of the internal Complied approved by the BoD on 05/09/2005, Minutes 7, 56. The Charter of the company contains no exemption Complied control service should be determined by the Board Article 5. 8. of the acquirer from the obligation to offer buyout of Directors. of the company’s ordinary shares (other securities 68. There are no persons in the internal control service Complied convertible into ordinary shares) to the shareholders convicted of committing offences in the sphere upon takeover. of economic activity; against the government, 57. The Charter or by-laws of the company contain Complied Mosenergo's Charter, Article 20, paragraph 20.1., against interests of the federal, regional and a requirement on obligatory engagement of an sub paragraph 36. local government service; or that have been independent appraiser to determine the proportion subjected to administrative penalties for offences for the conversion of shares on reorganisation. in the sphere of entrepreneurial activities or in Disclosure of Information the sphere of finance, taxes and levies and the 58. There is an internal document approved by the Complied Mosenergo's Informational Policy was approved by securities market. Board of Directors determining policies and the BoD on 01/11/2004, Minutes 8. 69. There are no persons in the internal control service Complied procedures used by the company for the disclosure who serve as members of the executive bodies of information (Regulation on Information Policies). of the company, as well as members, the CEO 59. The by-laws of the company contain a requirement to Not Complied The Company shall disclose all required information (manager), members of the management bodies or disclose purposes of placement of shares, persons in compliance to legislation of the Russian employees of any competitor of the company. that intend to acquire shares placed, including large Federation, the Charter and by-laws of the Company. stakes, and participation of officials of the company 70. The by-laws of the company establish dates for Partially It shall be included in the inspection plan and in the acquisition of the shares placed. the submission of documents and materials to the Complied procedure according to the Regulation on Internal internal control service for the assessment of financial Audit of OJSC Mosenergo. 60. The by-laws of the company contain a list of Complied Mosenergo's Charter. Article 17, paragraph 17.17. and operational transactions performed, and liability information, documents and materials that should Regulations on the General Meeting of Shareholders of officials and employees of the company for failure be provided to shareholders for the decision on of OJSC Mosenergo, Article 5, paragraph 5.6. to provide them in time. the issues put for the consideration of the General Regulations on the Informational Policy of OJSC Meeting. Mosenergo, Article 5, paragraph 5.9.5. 71. The by-laws of the company provide for the Complied The Regulations on Internal Audit of OJSC 61. The company has a web site and regularly discloses Complied Regulations on the Informational Policy of OJSC obligation of the internal control service to Mosenergo, Article 7, paragraph 7.1, sub paragraph information about the company on the web site. Mosenergo, Article 4, paragraph 4.7. communicate any violations detected to the Audit 7.1.4. www.mosenergo.ru Committee, and where there is no such committee 62. The by-laws of the company contain a requirement Complied Regulations on the Informational Policy of OJSC to the Board of Directors. to disclose information on the deals of the company Mosenergo, Article 4, paragraph 4.1., sub paragraph 72. The company’s Charter contains a requirement Not Complied with persons that are senior executives of the 4.4.4. on preliminary assessment of the practicality company in accordance with the Charter, and of transactions not envisaged in the company’s deals of the company with entities where senior financial and operational plan (unusual transactions) executives of the company directly or indirectly hold by the internal control service. 20 or more percent of the share capital or on which 73. The by-laws of the company establish a procedure Not Complied such persons may otherwise exercise significant for the agreement of any unusual transactions with influence. the Board of Directors. 54 55 74. There is an internal document determining the Not Complied The Regulations on the Audit Commission of OJSC 3 Insurance OJSC Mosenergo - IN- The subject of these agree- 4 transactions; Insurance TRANSACTION procedure of audits of the financial and operating Mosenergo was approved by the General Meeting of Agreements SURANT; OJSC SOGAZ ments is insurance of prop- insurance agreements are APPROVED activities by the internal audit commission, Shareholders of Mosenergo on May 30, 2002. - INSURER erty according to existing premium (total signed for the by the BoD, approved by the Board of Directors. 4 transac- legislation of the RF and the for insured prop- duration of one minutes 9, dated 75. The Audit Committee performs an assessment of Complied The Regulations on the Audit of the BoD of OJSC tions Issuer's Rules for Insur- erty): year. 08/12/2008. the auditor’s report before it is presented to the Mosenergo, Article 2, paragraph 2.1.4. ance of Property of Enter- 325,663,818.99 issue 5.1. shareholders in the General Meeting. prises, dated 20/08/2007, as roubles well as Rules for Insurance Dividends of Machinery and Mecha- 76. There is an internal document approved by the Not nisms against Failures, dated Board of Directors used as guidance by the Board Complied 20/08/2007, Rules for Insur- of Directors in developing recommendations on the ance of Lineal Part, Tech- size of dividends (Regulation on Dividend Policies). nological Equipment and Section p. 77. The Regulation on Dividend Policies contains a Not Equipment of Main Gas, Oil Section p. OJSC 'Mosenergo' Today 8. procedure for the determination of the minimum Complied and Goods Pipe Lines, dated OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. share of the net profit of the company used for the 20/08/2007. Mosenergo Operations 14. Analysis of Financial Performance 24. payment of dividends, and conditions under which Analysis of Financial Performance 24.

Social Responsibility 26. dividends are not paid or are not paid in full on 4 Insurance OJSC Mosenergo - IN- The subject of the agreement Insurance Pre- The insurance TRANSACTION Social Responsibility 26.

Corporate Governance 32. preferred shares for which the size of dividends is Agreement SURANT; OJSC SOGAZ is insuring against civil liabil- mium: agreement is APPROVED by Corporate Governance 32. determined in the company’s Charter. - INSURER ity of the Insurant in case of 42,306 roubles signed for the the BoD Additional Information 36. Additional Information 36. 78. Publication of information on dividend policies of Not damage to third parties re- duration of one Minutes 9, dated the company and any amendments thereto in a Complied sulting from malfunctioning year. 08/12/2008 periodical stipulated in the company’s charter for of hydraulic equipment, ac- issue 5.1. publication of announcements on General Meetings, cording to the Insurer's Rules and on the web site of the company in the Internet. for Insuring Civil Liability of Operating Entities and Own- ers of Hydraulic Equipment, Information on Interest Party Transactions dated 20/08/2007.

5 Insurance OJSC Mosenergo - IN- Insurance of Mosenergo's Insurance 1 year insur- TRANSACTION Board of Directors approved 23 interested-party transactions. Agreement SURANT; OJSC SOGAZ employees against acci- Premium: ance agree- APPROVED by - INSURER dents and decease. 18,659,120.00 ment the BoD roubles Minutes 9, dated The List of Interested-Party Transactions Negotiated and Pre-Approved by the Board of Directors of OJSC Mosenergo in 2009, 08/12/2008 According to Article 83 of the Federal Law On Joint Stock Companies issue 5.1.

No. Transaction Transaction Parties Subject of Transaction Transaction Deadline Decision of 6 Contract OJSC Mosenergo - IS- Providing services required 11,800,000 Until the Is- TRANSACTION Price the BoD about SUER for maintenance and cus- roubles includ- suer's decision APPROVED Transaction OJSC SR-DRAGa - tody of the Issuer's Regis- ing VAT to change the by the BoD, Approval REGISTRAR ter of Holders of Registered Registrar. minutes 7, dated Securities. 10/11/08. 1 Loan OJSC Bank of Mos- The lender provides a loan 1,600,000,000 Loan repay- TRANSACTION issue 6 Agreement cow - LENDER, OJSC to the borrower to replen- roubles ment date - APPROVED by 7 Insurance OJSC Mosenergo - IN- Medical insurance agree- Insurance Pre- The voluntary TRANSACTION Mosenergo - BOR- ish current assets. Interest 23/12/2009 the BoD Agreement SURANT, OJSC SOGAZ ment for the staff of OJSC mium: medical insur- APPROVED ROWER rate - 18% p.a. Minutes 7, 3 transac- - INSURER Mosenergo 36,296,870.57 ance contract by the BoD, dated 10/11/08 tions roubles comes into minutes 6, dated issue 13 effect from 16/10/2008 2 Loan OJSC Bank of Mos- The lender provides a loan 700,000,000 Loan repay- TRANSACTION the moment of issue 20 Agreement cow - LENDER, OJSC to the borrower to replen- roubles ment date - APPROVED by signing and will Mosenergo - BOR- ish current assets. Interest 23/06/2009 the BoD remain in force ROWER rate - 18% p.a. Minutes 7, until 12: 00 am dated 10/11/08 of the 31st of issue 14 December2009.

56 57 8 Insurance OJSC Mosenergo Insurance of transport Insurance Insurance TRANSACTION 11 Contract for OJSC 'Mosenergo' - In 2009 the Supplier The price of from TRANSACTION Agreement - INSURANT; OJSC vehicles and civil Premium: agreements are APPROVED by the Supply BUYER shall supply petroleum one tonne of 01/01/2009 to APPROVED by 2 transactions SOGAZ - INSURER liability (third party 28,607.00 signed for the the BoD of Petroleum OJSC Gazpromneft- derivatives (mark petroleum 31/12/2009 the BoD liability insurance) roubles duration of one Minutes 9, dated Derivatives Center - SELLER M-100 reduced fuel derivatives Minutes year. 08/12/2008 oil, diesel fuel) to the includes: 15, dated issue 5.1. Buyer's subsidiaries, - when supplied 27/04/2009 and the Buyer shall by rail on f.o.r. issue 9 receive and pay for conditions to petroleum derivatives. the station of 9 Out-of-Court OJSC Moscow Heat The parties have agreed 160,000,000 Not later TRANSACTION the receiver of Settlement Network Company - that the Defendant shall roubles than ten days APPROVED by cargo; VAT, rail PLAINTIFF transfer to the Plaintiff's after the the BoD tariff, payment OJSC 'Mosenergo' - account interest on confirmation Minutes for return of Section p. DEFENDANT borrowed funds; the of the Out- 18, dated empty tank- Section p. OJSC 'Mosenergo' Today 8. amount to be transferred of-Court 22/06/2009 wagons and OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. is 160,000,000 (one Settlement by issue 3 filling services; Mosenergo Operations 14. Analysis of Financial Performance 24. hundred sixty million) the Court of - when supplied Analysis of Financial Performance 24. Social Responsibility 26. roubles, 00 kopecks. Arbitration. by motor Social Responsibility 26.

Corporate Governance 32. transport on Corporate Governance 32. 10 Contract OJSC 'Mosenergo' - The seller shall transfer The price from TRANSACTION Additional Information 36. free wareh0ouse Additional Information 36. BUYER the Goods (motor of Goods is 03/03/2009 to APPROVED by of the receiver OJSC Gazpromneft- fuel) to the Buyer's determined 31/12/2009 the BoD of cargo: VAT, Center - SELLER ownership, and the according to Minutes transportation Buyer shall receive and current retail 15, dated costs of the pay for the goods. prices in the 27/04/2009 supplier and Significant provisions Seller's points issue 8 filling services. of the agreement for of sale, after all the supply of motor fuel discounts. 12 Supplementary OJSC 'Mosenergo' - Preparation and Not more than Until complete TRANSACTION between the Seller and contract ISSUER organisation of the 20,000,000 fulfilment of APPROVED by the Buyer: OJSC SR-DRAGa - Annual General Meeting roubles. obligations the BoD - the goods trademark REGISTRAR of Shareholders. including VAT thereunder. Minutes 16, and quantity shall dated 12/05/09, comply to e-maps issue 13 which are owned by the Seller; 13 Insurance OJSC 'Mosenergo' - Insurance of liability of 79,900 USD from TRANSACTION - e-maps are program- Agreement INSURANT officials and executive 18/09/2009 to APPROVED by med under the regime OJSC 'SOGAZ' - bodies against damages 17/09/2010 the BoD of daily of monthly INSURER to third parties resulting Minutes 9, dated restrictions for the from unintended 08/12/2008 supply of goods; incorrect actions of the issue 5.1. - ownership of the Go- insured persons. ods is transferred from the Seller to the Buyer 14 from the moment of Insurance OJSC 'Mosenergo' - Insurance of general 450,000.00 19/09/2009 to TRANSACTION registration in the Agreement INSURANT civil liability of the roubles 18/09/2010 APPROVED by Accounting Terminal of OJSC 'SOGAZ' - Insurant against the BoD the operation (special INSURER damages to third Minutes 9, dated equipment) after the parties. 08/12/2008 supply of goods; issue 5.1. - the quality of Goods 15 Lease OJSC Mosenergo Lease of commercial 20,073,091.14 from the 1st TRANSACTION shall comply to the Agreement (LESSOR) and OJSC premises located at: roubles with VAT of December APPROVED by requirements of existing Moscow Unified Power Moscow, Bolshaya 2008 to the the BoD national standards Network Company Pereyaslavskaya st., 31st of October Minutes (GOST), ToR and other (LESSEE) 12; total area of 1,861.9 2009. 15, dated regulatory acts of the square metres. 27/04/2009 RF. issue 11

58 59 16 Supplementary OJSC Mosenergo - The subject of the 3,127,585,704.80 from TRANSACTION Informational Policy Mosenergo organised 15 press tours to the Company's power contract CUSTOMER agreement of is roubles including 01/04/2009 to APPROVED by plants in 2009. The Company published 49 press releases and more OJSC Moscow Heat extension of contract VAT 30/06/2009 the BoD OJSC Mosenergo enforces an open information policy in than 700 publications in the press, as well as 20 TV broadcasts Network Company - number 6344-46, Minutes the company. The Company's operations are regulated by on federal and regional channels. Furthermore, Mosenergo EXECUTOR dated 26/04/2005 for 18, dated principles of corporate governance accepted in civilised participated in full-scale industry exhibitions and conferences. 2Q09. 22/06/2009 business, as well as principles of social responsibility and According issue 2 reliable partnership with public authorities. The key information resource of the Company is Mosenergo's to the contract, the official web site (http://www.mosenergo.ru). This web site Executor shall provide Informational Policy of OJSC Mosenergo is aimed at prompt provides full information about the Company's operations free of cost transfer of and full presentation of accurate information about the and allows us to respond promptly to inquiries submitted heat and heat transfer Company's activities, as well as providing free access to such by shareholders, investors, public officials and the media. medium through information to all interested parties: shareholders, investors, The web site publishes annual and quarterly shareholder implementing a series public officials, the media etc. reports, quarterly issuer reports, RAS and IFRS accounting Section p. of organisationally statements, information which can affect securities value, as Section p. OJSC 'Mosenergo' Today 8. and technologically Within the framework of Informational Policy implementation well as other required information. OJSC 'Mosenergo' Today 8. Mosenergo Operations 14. integrated measures Mosenergo Operations 14. Analysis of Financial Performance 24. for transmission of Analysis of Financial Performance 24. Social Responsibility 26. heat and heat transfer Social Responsibility 26.

Corporate Governance 32. medium by technical Corporate Governance 32.

Additional Information 36. equipment of heat Additional Information 36. networks owned by the Executor and/or in other lawful manner.

17 Supplementary OJSC Mosenergo - The subject of the 1,402,239,600.21 from TRANSACTION contract CUSTOMER additional agreement roubles including 01/07/2009 to APPROVED by OJSC Moscow Heat is extension of existing VAT 30/09/2009 the BoD Network Company - contract number 6344- Minutes EXECUTOR 46, dated 26/04/2005, 5, dated starting from 14/09/2009 01/07/2009 through issue 6 30/09/2009. According to the contract, the Executor shall provide free of cost transfer of heat and heat transfer medium through implementing a series of organisationally and technologically integrated measures for transmission of heat and heat transfer medium by technical equipment of heat networks owned by the Executor and/or in other lawful manner.

The Company did not negotiate transactions recognised are regulated by the procedure for approval of large-scale by the Federal Law on Joint Stock Companies as large- transactions according to the Company's Charter. scale transactions, as well as other transactions which

60 61 AUDIT REPORT Prepared by the Audit Commission Following the Inspection of OJSC ‘Mosenergo’ Financial and Business Activities in 2009

08.04.2010 Moscow City

The Audit Commission, elected by the General Meeting of Shareholders, dated June 30, 2009, completed the inspection and analysis of the Company's financial and business activities in 2009, according to the approved plan of work.

The inspection involved the review of the 2009 Annual Report, the Company's Balance Sheet and its Annexes, the Income Statement, the Auditor’s Report issued by CJSC PriceWaterhouseCoopers, charter documents and OJSC ‘Mosenergo’ decrees.

The 2009 Accounting Reports were prepared in compliance with the requirements set in the Federal Law of the Russian Federation No. 129-FZ of November 21, 1996 ‘On Accounting’, and Decree No. 34n of the Ministry of Finance of the Russian Federation of July 29, 1998, 'On Approval of the Ordinance on Accounting and Accounting Reports in the Russian Federation', and Decree No. 67n of the Ministry of Finance of the Russian Federation, of July 22, 2003, 'On Forms of Accounting Reports of Organisations', as well as other regulatory acts, which are part of the system regulating accounting and accounting reports in the Russian Federation. The Company's Accounting was carried out according to OJSC ‘Gazprom’ Decree No. 347 of December 29, 2008, 'On Approval of the Ordinance on the Accounting Policy of OJSC ‘Gazprom’ and its Affiliates and Subsidiaries for 2008', as well as OJSC ‘Mosenergo’ Decree No. 557 of December 22, 2008.

The responsibility for the accuracy of Accounting Reports in the inspection period is vested in the Company's Management. FINANCIAL REPORTS The analysis of the structure of the Company's assets and liabilities shows that the financial state of the Company was stable in the reporting period. IN ACCORDANCE WITH THE RUSSIAN ACCOUNTING STANDARDS The Company enforces a system of internal control over the accuracy of accounting and compliance with all regulations and rules of reporting.

On March 1, 2010, CJSC PriceWaterhouseCoopers submitted the Auditor’s Report on Accounting Reports which was prepared according to the Russian Accounting Standards. According to auditors, the Company's Accounting Reports accurately reflect, in all significant aspects, the financial state of the Company as of December 31, 2009, and the results of the Company's financial and business activities in the period from January 1, 2009 to December 31, 2009, according to the requirements of the Russian legislation regarding financial (accounting) reports.

Following the inspection of OJSC ‘Mosenergo’ financial and business activities, the Audit Commission believes that: – the Company’s Annual Accounting Report is prepared in compliance with the legislation of the Russian Federation and accurately reflects, in all significant aspects, the Company's financial situation as of December 31, 2009;

– financial information contained in the Company's Annual Report is accurate and complies with the data of financial (accounting) reports.

Chairman of the Audit Commission А.В. Белобров

Members of the Audit Commission В.А. Ковалев

Е.В. Голдобина

Е.С. Науменко 62 63 CJSC PriceWaterhouseCoopers (CJSC PwC Audit) Business Centre Belaya Ploshchad Butyrskiy Val St., 10 Moscow, Russia, 125047 Phone: +7 (495) 967 6000 Fax: +7 (495) 967 6001 www.pwc.ru

AUDITOR’S REPORT on Accounting Reports

To shareholders of the Open Joint Stock Company of Power and Electrification ‘Mosenergo’:

Auditor

CJSC PriceWaterhouseCoopers (CJSC PwC Audit)

State registration certificate № 008.890, issued by the Moscow Registration Chamber on February 28, 1992.

Certificate of record in the Unified State Register of Legal Entities regarding the legal entity registered before July 1, 2002 No.1027700148431, issued by the Moscow City Consolidated Inspectorate No.39 of the Russian Ministry of Taxes and Levies on August 22, 2002.

Member of the Audit Chamber of Russia (IE ACR) which is a self-regulating organisation of auditors – registration record No.870 in the Registry of Members of IE ACR. The main registration record number (ORRN) in the Register of Auditors and Audit Organisations is 10201003683.

Client

Open Joint Stock Company of Power and Electrification ‘Mosenergo’ (short name – OJSC ‘Mosenergo’).

Raushskaya Embankment 8, Moscow, Russia, 115035.

The Certificate of State Registration number 012.473, issued by the Moscow Registration Chamber on April 6, 1993.

The Certificate of Record in the Unified State Register of Legal Entities about the legal entity registered before July 1, 2002, number 1027700302420, dated October 11, 2002, is issued by the Moscow Administration of the Ministry of Taxes and Levies of the Russian Federation.

64 65 CJSC CJSC PriceWaterhouseCoopers PriceWaterhouseCoopers (CJSC PwC Audit) (CJSC PwC Audit) Business Centre Belaya Ploshchad Business Centre Belaya Ploshchad Butyrskiy Val St., 10 Butyrskiy Val St., 10 Moscow, Russia, 125047 Moscow, Russia, 125047 Phone: +7 (495) 967 6000 Phone: +7 (495) 967 6000 Fax: +7 (495) 967 6001 Fax: +7 (495) 967 6001 www.pwc.ru www.pwc.ru

AUDITOR’S REPORT on Accounting Reports of the Open Joint Stock Company of Power and Electrification ‘Mosenergo’

To shareholders of the Joint Stock Company of Power and Electrification ‘Mosenergo’:

1. We have audited the attached Accounting Reports of Open Joint Stock Company of Energy and Electrification ‘ Mosenergo’ amounts listed in Accounting Reports, as well as assessing the disclosure of financial and business information, appraising (hereinafter - the Company) for the period from January 1 through December 31, 2009. The Company's Accounting adherence to principals and rules of accounting used during the preparation of Accounting Reports. We also reviewed major Reports include the Balance Sheet, Income Statement, Change of Capital, Cash Flow Statement, Annex to the Balance valuations of the Company's Management and appraised the overall presentation of Accounting Reports. We believe that this Sheet, Explanatory Note to the Balance Sheet (hereinafter - Accounting Reports). Accounting Reports were prepared by audit provides a basis for our opinion on the accuracy of these Accounting Reports. the Company's Management in compliance with the legislation of the Russian Federation applicable to Accounting Reports. 4. In our opinion, the Company's Accounting Reports attached to this audit have been properly prepared to present in a fair Accounting Reports prepared in compliance with this legislation significantly differ from reports prepared according to the light and in all significant aspects, the Company's financial position as of December 31, 2009, as well as providing results International Financial Reporting Standards. of the Company's financial and business operations in the period from January 1 through December 31, 2009. Accounting Reports were prepared in compliance with the legislation of the Russian Federation applicable to Accounting Reports. 2. The Company's executive body is responsible for the preparation and presentation of Accounting Reports. Our obligation is to express our opinion on the accurate presentation, in all significant aspects, of these Accounting Reports following out audit. 5. Without changing our opinion about the accuracy of Accounting Reports, we would like to draw your attention to the fact that, starting from 2002 to 2008, the Company was carrying out a selective revaluation of its fixed assets. Economic changes 3. We conducted our audit in accordance with the Federal Law 'On Audit', Federal Audit Rules (standards), International Audit registered in this period show a substantial change of present (current) value of the non-revaluated fixed assets, which Standards and our internal standards. influenced the amount of accrued depreciation in 2008 and the comparable data listed in the Income Statement for 2009, in Line 020, Section 4 - 'Cost of Sold Goods, Products and Services'. This fact was disclosed in paragraph 19 of the second The audit was planned and carried out in such a way as to attain reasonable assurance that Accounting Reports contain no section of the Explanatory Note to the Company's Accounting Reports for 2009. As of January 1, 2009 the Company completed substantial misrepresentations. The audit was selective and included a test-based examination of evidence supporting the a full revaluation of its balance sheet fixed assets.

March 1, 2010

Director of Joint Stock Company R. Sood

Auditor E. G. Kostina Qualification Certificate No.K021345 for General Audit (termless)

66 67 Approved by the Ministry of Finance As of the beginning As of the end of of the Russian Federation, dated June 22, 2003, No. 67 n LIABILITIES Indicator Code of the reporting year the reporting period Tax Registration Reason Code 997450001 1 234 BALANCE SHEET III. CAPITAL AND RESERVES as of December 31, 2009 Charter capital 410 39 749 360 39 749 360 Codes Equity bought back from shareholders 411 (898 804) (870 825) Form 1 according to All-Russia Classifier of Management Documentation 0710001 Additional capital 420 126 696 534 126 283 308 Date (year, month, day) 2009.12.31 Reserve Capital, Including: 430 725 595 794 181 Organisation OJSC Mosenergo according to CCOG 00102798 reserve funds created in compliance with the legislation 431 725 595 794 181 Taxpayer's Identification Number Taxpayer’s number 7705035012 Retained earnings (unsecured loss) 470 (2 632 443) 2 221 113 Type of Operations: Electric-power industry, According to All-Russia Classifier of Economic Activities 40.10.11, TOTAL for Section III 490 163 640 242 168 177 137 heat-power engineering 40.30.11 IV. LONG-TERM LIABILITIES According to All-Russia Classifier of Legal and Business 47 / 42 Organisational and legal form / form of ownership Loans and credit facilities 510 14 743 910 17 699 975 Structures /All-Russia Classifier of Ownership Forms Open Joint Stock Company / Mixed Russian Company Deferred tax liabilities 515 2 862 112 4 146 140 Measurement Unit: thous., roubles according to All-Russia Classifier of Measurement Units 384 Other long-term liabilities 520 95 000 - Address: 115035, Moscow, Raushskaya Embankment, 8 TOTAL for Section IV 590 17 701 022 21 846 115 Check total V. SHORT-TERM LIABILITIES Date of approval Loans and credit facilities 610 8 193 698 2 416 391 Date of submission (approval) Payables, including: 620 12 929 882 14 588 755 suppliers and contractors 621 9 004 666 9 090 259 As of the beginning As of the end of accrued payroll 622 338 055 1 090 ASSETS Indicator Code of the reporting year the reporting period debts payable to public extra-budgetary funds 623 63 497 576 1234 arrears of taxes and levies 624 942 077 1 534 675 I. NON-CURRENT ASSETS other accounts payable 625 2 581 587 3 962 155 Intangible assets (04, 05) 110 115 95 Arrears of revenues payable to members (founders) 630 554 281 Fixed assets 120 134 978 915 132 570 291 incomes of future periods 640 64 313 62 850 Construction in progress 130 20 226 432 16 477 548 Other short-term liabilities 660 118 888 6 839 Long-term financial investments 140 119 511 119 331 TOTAL for Section V 690 21 307 335 17 075 116 Deferred tax assets 145 6 898 20 620 BALANCE (the sum of lines 490+590+690) 700 202 648 599 207 098 368 Other non-current assets 150 219 658 413 449 TOTAL for Section I 190 155 551 529 149 601 334 II. CURRENT ASSETS Inventories, 210 4 679 143 4 845 877 Statement of Valuables on Off-Balance Sheet Accounts including: As of the beginning of As of the end of the raw, materials and other similar valuables 211 4 323 331 4 496 613 Indicator name Indicator Code the reporting year reporting period rearers and fatteners 212 112 405 - 1 234 expenditures for work in progress 213 81 475 134 416 Fixed assets taken on lease, 910 118 454 42 840 422 finished products and goods for reselling 214 25 823 1 850 including: on long-term leasing 911 85 606 508 220 expenses of future periods 216 136 109 212 998 Inventories taken for safe custody 920 19 862 13 894 Value-added tax on purchased valuables 220 938 790 1 195 816 Bad debts written-off to losses 940 1 984 532 1 237 964 Receivables (expected to be paid in more than 12 230 4 108 217 4 311 100 Security for liabilities and payments received 950 7 289 077 3 727 424 months from the reporting date), Security for liabilities and payments issued 960 380 503 296 165 Receivables (expected to be paid within 12 months from 240 20 851 990 31 974 470 Depreciation of housing stock 970 91 240 5 059 the reporting date), including: buyers and customers 241 7 261 375 14 368 127 Short-term financial investments 250 13 484 312 12 809 587 Cash and cash equivalents 260 2 820 332 2 068 255 Head of Company V.G. Yakovlev Chief Accountant S.A. Suraev Other current assets 270 214 286 291 929 TOTAL for Section II 290 47 097 070 57 497 034 (signature) (signature) BALANCE (the sum of lines 190+290) 300 202 648 599 207 098 368 On this day «1» of march 2010

68 69 Approved by the Ministry of Finance Breakdown of separate profit and losses of the Russian Federation, dated June 22, 2003, No. 67 n For the Reporting Period YoY Indicator name Line code profit loss profit loss INCOME STATEMENT 123456 for 2009 Penalties, fines and forfeits recognized or imposed by 210 73 214 47 192 19 461 15 910 Codes decision of the court (arbitration): Form 2 according to All-Russia Classifier of Management Documentation 0710002 Profit (loss) of previous years: 220 246 359 55 416 273 291 264 374 Date (year, month, day) 2009.12.31 Reimbursement for losses inflicted by non-fulfilment or 230 2 750 93 027 2 489 389 332 Organisation OJSC Mosenergo according to CCOG 00102798 improper fulfilment of obligations: Taxpayer's Identification Number Taxpayer’s number 7705035012 Deviations in rates of exchange for transactions in 240 108 385 154 059 155 861 267 049 foreign currency: Type of Operations: Electric-power industry, According to All-Russia Classifier of Economic Activities 40.10.11, 40.30.11 heat-power engineering According to All-Russia Classifier of Legal and Business 47 / 42 Allocations to valuation reserves: 250 Х 1 654 930 Х 2 477 410 Organisational and legal form / form of ownership Structures /All-Russia Classifier of Ownership Forms Writing off of accounts receivable and payable with 260 5 859 12 108 2 608 1 754 expired period of limitation Open Joint Stock Company / Mixed Russian Company Measurement Unit: thous., roubles according to All-Russia Classifier of Measurement Units 384 Address: 115035, Moscow, Raushskaya Embankment, 8 Head of Company V.G. Yakovlev Chief Accountant S.A. Suraev

(signature) (signature) On this day «1» of march 2010 For the Reporting Indicator name Line code Period YoY I. Operating income and expenditures Revenue from sales of goods, products, works, services 010 112 227 438 94 779 370 (net of VAT, excises and similar mandatory payments) Production cost of goods, products, works, services 020 (105 137 953) (89 980 958) sold Gross profit 029 7 089 485 4 798 412 Business expenses 030 (75 023) (110 911) Management expenses 040 -- -- Profit (loss) from sales 050 7 014 462 4 687 501 II. Other gains and expenses Interest receivable 060 1 320 406 1 510 644 Interest payable 070 (2 318 453) (1 208 340) Income from interest in other organisations 080 25 194 7 878 Other gains 090 7 495 044 19 113 787 Other expenses 100 (6 563 065) (21 891 401) Profit (loss) before tax 140 6 973 588 2 220 069 Deferred tax assets 141 13 722 7 465 Deferred tax liabilities 142 (1 284 028) (285 999) Profit tax- related expenses, current 150 (1 520 432) (1 198 150) Other similar obligatory payments 151 326 140 628 336 Net Profit (loss) for the reporting period 190 4 508 990 1 371 721 FOR REFERENCE Standing tax liabilities (assets) 200 1 062 323 314 823 Only for annual accounting statements Basic earnings (loss) per share 201 0,1138 0,0346 Diluted earnings (loss) per share 202 0,0000 0,0000

70 71 Approved by the Ministry of Finance Indicator Equity bought of the Russian Federation, dated June 22, 2003, No. 67 n Charter Additional Retained earnings back from Total Name Code capital capital (unsecured loss) CAPITAL CHANGE REPORT shareholders for 2009 12 3456 78 Codes 2009 год Form 3 according to All-Russia Classifier of Management Documentation 710003 (reporting year) Date (year, month, day) 2009.12.31 Result of revaluation of 062 х 45 643 367 х (3 696 246) - 41 947 121 Organisation OJSC Mosenergo according to CCOG 00102798 fixed asset items Taxpayer's Identification Number Taxpayer’s number 7705035012 Changes in accounting 063 х - х (1 539 469) - (1 539 469) Type of Operations: Electric-power industry, According to All-Russia Classifier of Economic Activities 40.10.11, 40.30.11 policy heat-power engineering According to All-Russia Classifier of Legal and Business 47 / 42 Closing Balance as of 100 39 749 360 126 696 534 725 595 (2 632 443) (898 804) 163 640 242 Organisational and legal form / form of ownership Structures /All-Russia Classifier of Ownership Forms January 1 of the report- Open Joint Stock Company / Mixed Russian Company ing year Measurement Unit: thous., roubles according to All-Russia Classifier of Measurement Units 384 Net profit 105 х х х 4 508 990 - 4 508 990 Address: 115035, Moscow, Raushskaya Embankment, 8 Dividends 106 х х х - - -

I. Change in capital Reserve Fund alloca- 110 х х 68 586 (68 586) - - tions Indicator Equity bought Increase of the capital 120 - - - 413 226 27 979 441 205 Charter Additional Retained earnings back from Total value for the account of: capital capital (unsecured loss) Name Code shareholders other 124 - - - 413 226 27 979 441 205 12 3456 78 Decrease of the capital 130 - (413 226) - (74) - (413 300) value for the account of: Closing balance as of 010 39 749 360 76 635 945 688 621 1 236 271 118 310 197 December 31 of the other 135 - (413 226) - (74) (413 300) year preceding the Closing Balance as of 140 39 749 360 126 283 308 794 181 2 221 113 (870 825) 168 177 137 previous year December 31 of the 2008 год -- reporting year (previous year) Result of revaluation of 012 х 4 445 944 х (4 464) - 4 441 480 fixed asset items Changes in accounting 013 х - х 105 - 105 II. Reserves policy Closing balance as of 020 39 749 360 81 081 889 688 621 1 231 912 - 122 751 782 January 1, 2009 of the Indicator Closing Received Used Closing Balance previous year Name Code Balance Net profit 025 х х х 1 371 721 - 1 371 721 123456 Dividends 026 х х х - - Reserve funds created in compliance with the Reserve Fund alloca- 030 х х 36 974 (36 974) - - legislation: tions Reserve capital Increase of the capital 040 36 613 - 36 613 data for the previous year 150 688 621 36 974 725 595 value for the account of: data for the reporting year 151 725 595 68 586 794 181 reorganisation of the 043 - х х 7 891 - 7 891 Valuation reserves legal entity bad debt reserves other 044 - 28 722 - 28 722 data for the previous year 160 1 389 265 2 365 361 (2 033 410) 1 721 216 Decrease of the capital 050 - (28 722) (898 804) (927 526) value for the account of: data for the reporting year 161 1 721 216 1 653 933 (1 791 933) 1 583 216 reorganisation of the 053 - х х - (870 825) (870 825) provision for impairment of financial investments legal entity data for the previous year 162 644 - (198) 446 buyback of shares 054 (27 979) (27 979) data for the reporting year 163 446 997 1 443 other 055 - (28 722) (28 722) provision formed in connection with the conse- Closing balance as of 060 39 749 360 81 053 167 725 595 2 603 272 (898 804) 123 232 590 quences of business contingencies December 31 of the data for the previous year 166 6 839 112 049 - 118 888 previous year data for the reporting year 167 118 888 (112 049) 6 839 72 73 For reference Approved by the Ministry of Finance of the Russian Federation, dated June 22, 2003, No. 67 n Indicator Opening balance Closing balance Name Code for the reporting year for the reporting period CASH FLOW STATEMENT 12 3 4 for 2009

1) Net Assets 200 163 704 555 168 239 987 Codes From budget funds From off-budget funds Form 4 according to All-Russia Classifier of Management Documentation 0710004 for the reporting for the previous for the reporting for the previous Date (year, month, day) 2009.12.31 year year year year Organisation OJSC Mosenergo according to CCOG 00102798 3456 Taxpayer's Identification Number Taxpayer’s number 7705035012 2) Received for core activities spend- 210 389 073 342 386 331 547 Type of Operations: Electric-power industry, According to All-Russia Classifier of Economic Activities 40.10.11, 40.30.11 ing, total heat-power engineering According to All-Russia Classifier of Legal and Business 47 / 42 including: Organisational and legal form / form of ownership Structures /All-Russia Classifier of Ownership Forms Payments to Chernobyl victims 211 - - - - Open Joint Stock Company / Mixed Russian Company other 212 389 073 342 386 331 547 Measurement Unit: thous., roubles according to All-Russia Classifier of Measurement Units 384 Address: 115035, Moscow, Raushskaya Embankment, 8 Head of Company V.G. Yakovlev Chief Accountant S.A. Suraev For the For the Name Indicator Code (signature) (signature) Reporting Period Previous Period On this day «1» of march 2010 1234 Opening cash balance for the beginning 010 2 820 170 8 233 767 of the reporting year Cash flow from current activity Cash received from buyers, customers 020 123 923 332 107 541 482 Other gains (proceeds) 050 1 680 632 5 958 199 Cash allocated for: payment for purchased goods, works, services, raw materi- 150 (88 918 351) (80 759 020) als and other current assets Payment for labour 160 (6 430 701) (6 384 388) Payment of dividends, interest 170 (2 415 314) (1 537 801) Payment of interest 1701 (2 415 314) (1 537 778) Payment of dividends 1702 - (23) settlements of taxes and levies 180 (9 797 712) (5 655 549) social payments 183 (587 897) (865 577) other expenses (payments) 190 (7 906 115) (10 598 948) allocations to state off-budget funds 1901 (1 206 432) (1 347 860) payment of advances 1903 (4 075 067) (4 209 322) other expenses 1904 (2 624 616) (5 041 766) Net Cash from current activity 200 9 547 874 7 698 398 Cash flow from investments Revenue from sales of fixed assets and other non-current 210 3 899 476 10 530 assets Revenue from sales of securities and other financial invest- 220 1 041 366 15 408 152 ments Dividends received 230 22 926 8 461 Interest received 240 77 088 990 856 Redemption of Deposits 250 5 001 000 26 312 674 Proceeds from redemption of loans received from other 260 606 125 - organisations Placement of deposits 270 (5 001 000) (15 520 000) Acquisition of fixed assets, of income-generating invest- 280 (9 049 074) (28 669 808) 74 ments into tangible assets and of intangible assets 75 For the For the Approved by the Ministry of Finance Name Indicator Code Reporting Period Previous Period of the Russian Federation, dated June 22, 2003, No. 67 n 1234 Acquisition of securities and other financial investments 290 - (53 245) ANNEX TO THE BALANCE SHEET Loans granted to other organizations 300 - (13 375 000) for 2009 Other Expenses 310 (3 546 856) (2 183 591) Codes payment of advances 3101 (3 277 440) (1 658 178) Form 5 according to All-Russia Classifier of Management Documentation 0710005 other expenses 3102 (269 416) (525 413) Date (year, month, day) 2009.12.31 Net Cash from Investments 320 (6 948 949) (17 070 971) Organisation OJSC Mosenergo according to CCOG 00102798 Cash flow from financial activities Taxpayer's Identification Number Taxpayer’s number 7705035012 Proceeds from loans and credit facilities granted by other According to All-Russia Classifier of Economic Activities 40.10.11, 40.30.11 340 15 766 341 11 080 932 Type of Operations: Electric-power industry, organizations heat-power engineering According to All-Russia Classifier of Legal and Business 47 / 42 Repayment of loans and credit facilities (net of interest) 360 (18 711 271) (5 447 159) Organisational and legal form / form of ownership Structures /All-Russia Classifier of Ownership Forms Extinction of financial lease obligations 370 (405 989) (116 889) Open Joint Stock Company / Mixed Russian Company Other Expenses 380 - (1 558 327) Measurement Unit: thous., roubles according to All-Russia Classifier of Measurement Units 384 Net Cash from Financial Operations 390 (3 350 919) 3 958 557 Net increase (decrease) in cash and cash equivalents 400 (751 994) (5 414 016) Closing balance for the reporting year 410 2 068 176 2 819 751 Intangible Assets Effect of foreign exchange rate fluctuations against the 420 7 2 968 Availability as rouble Availability as Indicator of the begin- Received Retired of the end of the ning of the reporting period Name Code reporting year Head of Company V.G. Yakovlev Chief Accountant S.A. Suraev 123456 Intellectual property objects (exclusive rights to 010 147 -- -- 147 (signature) (signature) intellectual property results) On this day «1» of march 2010 including: with owner's rights to trade and service mark, 014 147 -- -- 147 name of the place of goods origin Total 045 147 -- -- 147

Indicator Availability as Availability as of the begin- of the end of ning of the the reporting Name Code reporting year period 1234 Amortisation of intangible assets, total 050 32 52 including owner’s rights to trade and service mark, name of the place of goods origin 051 32 52

76 77 Fixed Assets Financial Investments Availability as Availability as Indicator Long-term Short-term Indicator of the begin- Received Retired of the end of the ning of the Availability as Availability as reporting period Name Code reporting year of the begin- of the end of Availability as of Availability as Name Code 123456 ning of the the reporting the beginning of of the end of the Buildings 110 82 146 811 4 566 792 (1 600 503) 85 113 100 reporting year period the reporting year reporting period Facilities and transfer devices 111 78 015 009 1 940 121 (18 214) 79 936 916 123456 Machines and equipment 112 153 281 270 2 290 880 (312 295) 155 259 855 Contributions to charter (joint-stock) capitals of 510 110 579 111 396 0 0 other organizations, total Transport vehicles 113 1 117 197 5 169 (147 555) 974 811 including those of subsidiaries and related business 511 54 487 54 587 0 0 Production and household tools 114 267 492 7 242 (51 998) 222 736 companies Work livestock 115 0 0 Securities of other organisations, total 520 9 378 9 378 0 0 Productive livestock 116 159 614 55 265 (214 879) -- including debt securities (bonds, bills of exchange) 521 9 378 9 378 0 0 Perennial plants 117 147 147 Borrowings granted 525 0 0 13 443 600 12 768 875 Other types of fixed assets 118 47 953 345 (12 910) 35 388 Other 535 -- 0 40 712 40 712 Land slots and environmental management sites 119 230 6 515 6 745 Total 540 119 957 120 774 13 484 312 12 809 587 Capex for land reclamation 120 0 0 Out of the total amount, financial investments that have a current market value: Total 130 315 035 723 8 872 329 (2 358 354) 321 549 698 Contributions to charter (joint-stock) capitals of 550 27 182 51 333 0 0 Availability as of Availability as other organizations, total Indicator the beginning of the of the end of the Total 570 27 182 51 333 0 0 Name Code reporting year reporting period 1234FOR REFERENCE Amortisation of fixed assets, total 140 180 056 808 188 979 407 For financial investments that have a current 580 61 982 24 151 0 0 including: market value, change in the value as a result of buildings and facilities 141 81 661 470 84 879 626 evaluation adjustment machinery, equipment, transport vehicles 142 98 209 719 103 986 519 other 143 185 619 113 262 Fixed assets given on lease, total 150 37 030 839 47 283 744 Accounts Receivable and Payable including: buildings 151 22 839 610 2 383 928 Opening Closing Indicator facilities 156 13 612 696 44 319 679 balance for balance for the reporting the reporting machinery, equipment, transport vehicles 152 577 925 579 619 Name Code period period other 153 608 518 1234 Fixed asset items laid up 155 242 659 242 064 Accounts receivable: Fixed asset items received on lease, total 160 118 454 42 840 422 short-term, total 610 22 573 206 33 526 507 including: including: including: buildings and facilities 161 3 546 387 969 settlements with buyers and customers 611 8 792 529 15 679 874 machinery, equipment, transport vehicles 162 114 908 144 113 advances granted 612 12 337 057 15 182 609

other 613 1 443 620 2 664 024 other 163 0 42 308 340 long-term, total 620 4 108 217 4 342 279 Real estate accepted for operation and undergoing state registration 165 7 200 347 7 234 354 including: Availability as of Availability as the beginning of the of the end of the settlements with buyers and customers 621 0 Code reporting year reporting period advances granted 622 4 020 277 4 279 325 FOR REFERENCE 2 3 4 other 623 87 940 62 954 Fixed asset revaluation results: 170 41 947 121 4 441 480 Total 630 26 681 423 37 868 786 original (replacement cost) value 171 87 757 401 17 724 960 amortisation 172 45 810 280 13 283 480 Change in the value of fixed asset items due to of additional construction, 180 3 102 124 1 450 672 additional equipment, refurbishment, and partial liquidation 78 79 Opening Closing Security Indicator balance for balance for Opening Closing the reporting the reporting Indicator Name Code period period balance for balance for the reporting the reporting 1234 Name Code period period Accounts payable: 1234 short-term, total 640 21 123 580 17 005 146 received, total 810 7 289 077 3 727 424 including: including: settlements with suppliers and contractors 641 9 004 666 9 090 259 Property pledged 820 52 385 35 639 advances received 642 1 473 355 2 129 550 including settlements on taxes and levies 643 942 077 1 534 675 fixed asset items 821 29 885 5 753 loans 644 7 966 999 3 468 other 823 22 500 29 886 borrowings 645 226 699 2 412 923 Issued, total 830 380 503 296 165 other 646 1 509 784 1 834 271 including: long-term, total 650 14 838 910 17 699 975 Property pledged 840 6 899 057 0 including: including loans 653 5 331 667 3 287 732 fixed asset items 841 6 899 057 0 borrowings 654 9 412 243 14 412 243 other 655 95 000 0 Total 660 35 962 490 34 705 121 State subsidies Operating Expenses (by cost elements) Indicator For the Indicator for the for the reporting YoY reporting year previous year Name Code period Name Code 1234 1234Public funding received in the reporting year, total 910 388 795 342 311 Material expenses 710 80 301 284 69 918 918 including: Labour costs 720 7 235 990 7 981 381 Agricultural subsidies 911 17 876 Allocations for social needs 730 1 214 041 1 550 908 Other 912 388 795 324 435 Amortisation 740 9 963 005 6 359 512 Other costs 750 6 498 656 4 281 150 Total for cost elements 760 105 212 976 90 091 869 Head of Company V.G. Yakovlev Chief Accountant S.A. Suraev Change in balances (increase [+], reduction [-]): of work in progress 765 52 941 (286) (signature) (signature) of deferred expenditure 766 270 680 126 577 On this day «1» of march 2010

80 81 OJSC «Mosenergo» Explanatory Note to Mosenergo Annual Accounting Statements for 2009 OJSC «Mosenergo» CTPP-27 141031, Moscow Region, Mytishchi District, post office Chelobityevo Energosvyaz 115035, Moscow, Sadovnicheskaya st., 15/2 Explanatory Note to Central Repairs and Mechanical Plant (CRMP) 109428, Moscow, Ryazanskiy prospekt, 10 Mosenergo Annual Accounting Statements for 2009 Mosenergonaladka (MEN) 115432, Moscow 2nd Kozhukhovskiy proezd, 29/2, building 16 Moselektroremenergo (MERE) 109428, Moscow, Ryazanskiy prospekt, 10 I. General Information IT Centre 123995, Moscow, Berezhkovskaya Embankment, 16 Avtokhozyaistvo (ATH) 121059, Moscow, Berezhkovskaya Embankment, 18 1. Background Information Teplosbyt 105005, Moscow, Aptekarskiy per., 4, building 4 Sales and production enterprise 121059, Moscow, Berezhkovskaya Embankment, 18 The open joint-stock company of power and electrification Mosenergo is a regional power company operating in the field of of work supply (Energotorg) electricity and capacity generation, heat generation and distribution in Moscow and the Moscow Region. Agroindustrial holding Shaturskiy (APK Shaturskiy) 140711, Moscow Region, Shaturskiy District, Petrovskoe village, 2 Teplovye Seti 115184, Moscow, B. Tatarskaya st., 46A The share of revenue from Mosenergo operations listed above amounts to 92.78% of total revenue from sale of goods, works and services (90.57% in 2008). According to the BoD's resolution number 12, dated February 13, 2009 about the liquidation of subsidiaries, the Company liquidated OJSC Mosenergo (hereinafter - the Company) was registered in the Russian Federation on April 6, 1993 under Ordinance 169-P the following subsidiaries in 2009: issued by the State Property Management Committee on March 26, 1993. As a result of privatisation of the Russian power industry, the – CTPP-6; state-owned company MPO “Mosenergo” was restructured as an open joint-stock company. Individual assets and liabilities previously – CTPP-28; under control of the Ministry of Fuel and Energy of the Russian Federation were transferred to the Company's Balance Sheet. – The Enterprise for Production and Technological Furnishing; – Pilot Plant for Automation and Instruments; The Certificate of state registration number 012. 473 is issued by Moscow Registration Chamber in the Government of Moscow on – Special Design and Technological Bureau of High-Voltage and Cryogenic Equipment; April 6, 1993. The Certificate of Record in the Uniform State Register of Legal Entities about the legal entity registered before July 1, – Mosenergospetsremont; 2002, number 1027700302420 dated October 11, 2002, is issued by the Moscow Administration of the Ministry of Taxes and Levies – Moscow Design Institute for Power Facilities; of the Russian Federation. The Company is registered at the following address: 115035, Moscow, Raushskaya Embankment, 8. – Medical and sanitary facility.

The Company's shares are traded on MICEX and RTS Stock Exchanges. Within the frameworks of the program on organisational chart optimization and property management Mosenergo continued operations to liquidate MEN and IVC, as well as started liquidation of the following branches: Energosvyaz, CRMP and MERE. We In April 2009 OJSC Gazprom transferred its share of 53.47% of the Company to its 100%-owned subsidiary, Gazprom Energoholding, expect that these decisions regarding Mosenergo reorganisation will be fully implemented in 2010. ltd. The Company's own shares as of December 31, 2009: - 53.498% owned by Gazprom Energoholding, ltd; 3. Key Activities of the Company - 26.446% owned by The Moscow Department of Property; - 15.842% owned by legal entities and nominee shareholders; Key business activities of the Company include: generation of electricity and heat; supply (sales) of electricity and heat; - 3.861% owned by individuals; procurement (purchase) of electricity on the wholesale market of electricity and capacity; procurement (purchase) of thermal - 0.353% posted on Mosenergo's bankbook. energy; maintenance of heating networks; design and cost estimate activities.

The number of staff on the Company's payroll amounted to 12,599 people in 2009 (16,725 people in 2008). The Company also carries out other types of activities, including: communication services, IT services, agricultural activities; commercial activities and other. 2. Affiliates (Structural Subdivisions) 4. Information about Corporate Governance, Executive and Control Bodies As of December 31, 2009 the Company included 25 of regional subsidiaries: Name of Subsidiary (Structural Subdivisions) Domicile Based on Resolution of the Board of Directors dated March 31, 2008 (Minutes No.25) Yakovlev Vitaliy Georgievich is appointed as the General Director of the Company. P.G. Smidovich HPS-1 115035, Moscow, Sadovnicheskaya st., 11 R.E. Klasson TPP-3 142530, Moscow Region, Till Shareholders’ Annual General Meeting dated May 21, 2008, the governing bodies of the Company included: CTPP-8 109316, Moscow, Potapovskiy proezd, 1 - Board of Directors CTPP-9 115280, Moscow, Avtozavodskaya st., 12, building 1 M.Y. Ufaev CTPP-11 111024, Moscow, Entusiastov highway, 32 First, Last and Middle Name Job position as of the moment of election to the Board of Directors of Mosenergo CTPP-12 123995, Moscow, Berezhkovskaya Embankment, 16 Pyotr Pavlovich Biryukov First deputy Mayor of Moscow in the Moscow Government, head of the Municipal Economy CTPP-16 123298, Moscow, 3 Khoroshevskaya st., 14 Complex of Moscow CTPP-17 142800, Moscow Region, Stupino, Frunze st, 19 Bogdan Vladimirovich Budzulyak Member of the Executive Board, head of Gas Transportation, Underground Storage and Usage CTPP-20 117312, Moscow, Vavilova st., 13 Department, OAO Gazprom CTPP-21 125412, Moscow, Izhorskaya st., 9 Anatoliy Anatolievich Gavrilenko General Director of CJSC 'Leader' CTPP-22 140091, Moscow Region, Dzerzhinskiy, Energetikov st., 5 Valeriy Alexandrovich Golubev Deputy Chairman of Gazprom Managing Board CTPP-23 107497, Moscow, Montazhnaya st., 1/4 Alexey Alexandrovitch Mityushov CEO of Gazpromenergo, ltd. CTPP-25 119530, Moscow, General Dorokhov st., 16 Olga Petrovna Pavlova Member of the Executive Board, Head of Property and Corporate Relations Department, OJSC CTPP-26 117403, Moscow, Vostryakovskiy proezd, 10 Gazprom 82 83 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 Kirill Gennadievich Seleznev Chairman of the Board of Directors Mosenergo, member of the Executive Board, Head of Dmitri Alexandrovitch Barshak Director of CTPP-21, a subsidiary of OJSC Mosenergo Marketing, Gas and Liquid Hydrocarbons Department, OJSC Gazprom, Director General, Mezhregiongaz, ltd. Ivan Vasilievich Galas Director of CTPP-20, a subsidiary of OJSC Mosenergo Vladimir Nikolayevich Silkin Deputy Moscow Mayor in the Government of Moscow, Head of the Unit for Property and Land Artyom Igorevich Dmitriev Deputy General Director for Procurement and Production Furnishing, OJSC Mosenergo Affairs of Moscow, Head of the Property Department of the Government of Moscow Nikolay Alexeevich Zroychikov Director of CTPP-23, a subsidiary of OJSC Mosenergo Evgeniy Viktorovich Sklyarov Head of the Fuel and Power Department of Moscow Alexander Sergeevitch Ivannikov Deputy General Director for Finances and Budgeting ,OJSC Mosenergo Yuri Arkadievich Udaltsov Member of the Executive Board, Head of the Reform Management Centre, RAO UES of Russia Vladimir Valentinovich Sergeev First Deputy General Director, Chief Engineer, OJSC Mosenergo Denis Vladimirovich Fyodorov Head of the Department for the Development of the Electricity and Power Sector and Marketing in Vasiliy Yurievich Tulskiy Investment Director of OJSC Mosenergo the Power Industry of the Department for marketing, Gad and Liquid Hydrocarbons Department, Anna Sergeevna Tsaregorodtseva Deputy General Director for HR Management, OJSC Mosenergo OJSC Gazprom. Vitaliy Georgievich Yakovlev Chairman of the Executive Board of OJSC Mosenergo, General Director, OJSC Mosenergo Nikolay Grigorievich Shulginov Deputy Chairman of the Executive Board, OJSC SO UES Vitaliy Georgievich Yakovlev General Director, OJSC Mosenergo After Shareholders’ Annual General Meeting dated June 30, 2009, the governing bodies of the Company include:

- Audit Commission - Board of Directors First, Last and Middle Name Job position as of the moment of election to the Audit Commission of Mosenergo First, Last and Middle Name Job position as of the moment of election to the Board of Directors of Mosenergo Andrey Viktorovich Belovrov Deputy Head of Internal Audit and Affiliates Control of Financial and Economic Activities Pyotr Pavlovich Biryukov First deputy Mayor of Moscow in the Moscow Government, head of the Municipal Economy Department, Head of Gas Supplying Organisations Control and Maintenance Department, OJSC Complex of Moscow Gazprom. Anatoliy Anatolievich Gavrilenko General Director of CJSC 'Leader' Rafael Vladimirovich Ishutin Chairman of the Audit Commission of OJSC Mosenergo. Head of the Department of Internal Valeriy Alexandrovich Golubev Deputy Chairman of Gazprom Managing Board Audit and Control of Finance and Business Operations of Subsidiaries and Affiliates, as well as Alexander Pavlovich Dushko Deputy Head of the Department for Finance and Economy, OJSC Gazprom, Financial Director, Organisations of the Management Administration of OJSC Gazprom. Gazprom Energoholding, ltd. Anatoliy Nikolayevich Klyuchnikov Head of the Department for Control of Organisations Providing Reliable Operations of the Igor Vyacheslavovich Ignatov Deputy Head of the Property Department of the Government of Moscow Gas Supply System in the Department of Internal Audit and Control of Finance and Business Alexey Alexandrovitch Mityushov General Director, Gazpromenergo, ltd., General Director, OJSC WGC-6 Operations of Subsidiaries and Affiliates, as well as Organisations of the Management Administration of OJSC Gazprom. Olga Petrovna Pavlova Member of the Executive Board, Head of Property and Corporate Relations Department, OJSC Gazprom Vitaliy Anatolievich Kovalyov Deputy Head of the Department for Control of Organisations Providing Reliable Operations of the Gas Supply System in the Department of Internal Audit and Control of Finance and Kirill Gennadievich Seleznev Chairman of the Board of Directors Mosenergo, member of the Executive Board, Head of Business Operations of Subsidiaries and Affiliates, as well as Organisations of the Management Marketing, Gas and Liquid Hydrocarbons Department, OJSC Gazprom, Director General, Administration of OJSC Gazprom. Mezhregiongaz, ltd. Irina Nikolaevna Milyutina Chief Expert of the Department of Corporate Control in the Department for Property Management Vladimir Nikolayevich Silkin Deputy Moscow Mayor in the Government of Moscow, Head of the Unit for Property and Land and Corporate Relations of OJSC Gazprom. Affairs of Moscow, Head of the Property Department of the Government of Moscow Evgeniy Viktorovich Sklyarov Head of the Fuel and Power Department of Moscow Before Resolution of the Board of Directors dated 13/02/2009 (Minutes No.12) was enforced, the elected members of the Executive Denis Vladimirovich Fyodorov Head of the Department for the Development of the Electricity and Power Sector and Marketing in Board are: the Power Industry of the Department for marketing, Gad and Liquid Hydrocarbons Department, First, Last and Middle Name Job position as of the moment of election to the Executive Board of Mosenergo OJSC Gazprom, General Director, Gazprom Energoholding, ltd. Elena Viktorovna Andreeva Deputy General Director for Sales, OJSC Mosenergo Nikolay Grigorievich Shulginov First Deputy Chairman of the Executive Board, OJSC SO UES Svetlana Vladimirovna Antonova Deputy General Director for Legal Issues, OJSC Mosenergo Vitaliy Georgievich Yakovlev General Director, OJSC Mosenergo Dmitri Alexandrovitch Barshak Director of CTPP-21, a subsidiary of OJSC Mosenergo Ivan Vasilievich Galas Director of CTPP-20, a subsidiary of OJSC Mosenergo - Audit Commission Yuri Efimovich Dolin Deputy General Director for Capital Construction and Procurement, OJSC Mosenergo First, Last and Middle Name Job position as of the moment of election to the Audit Commission of Mosenergo Nikolay Alexeevich Zroychikov Director of CTPP-23, a subsidiary of OJSC Mosenergo Andrey Viktorovich Belobrov Head of the Department for Control of Organisations Providing Reliable Operations of the Alexander Sergeevitch Ivannikov Deputy General Director for Finances and Budgeting ,OJSC Mosenergo Gas Supply System in the Department of Internal Audit and Control of Finance and Business Naum Mikhailovich Sandler Director of Mosenergoproekt, a subsidiary of OJSC Mosenergo Operations of Subsidiaries and Affiliates, as well as Organisations of the Management Vladimir Valentinovich Sergeev First Deputy General Director, Chief Engineer, OJSC Mosenergo Administration of OJSC Gazprom. Anna Sergeevna Tsaregorodtseva Deputy General Director for HR Management, OJSC Mosenergo Elena Vladimirovna Goldobina Chief Economist, Deputy Head of the Department, OJSC Gazprom Lev Mikhailovich Tsenin Director of Mosenergospetsremont, a subsidiary of OJSC Mosenergo Rafael Vladimirovich Ishutin Head of the Department of Internal Audit and Control of Finance and Business Operations of Subsidiaries and Affiliates, as well as Organisations of the Management Administration of OJSC Vitaliy Georgievich Yakovlev Chairman of the Executive Board of OJSC Mosenergo, General Director, OJSC Mosenergo Gazprom. Vitaliy Anatolievich Kovalyov Head of the Department for Control of Organisations Providing Reliable Operations of the After Resolution of the Board of Directors dated 13/02/2009 (Minutes No.12) was enforced, the elected members of the Executive Gas Supply System in the Department of Internal Audit and Control of Finance and Business Board are as follows: Operations of Subsidiaries and Affiliates, as well as Organisations of the Management First, Last and Middle Name Job position as of the moment of election to the Executive Board of Mosenergo Administration of OJSC Gazprom. Elena Viktorovna Andreeva Deputy General Director for Sales, OJSC Mosenergo Evgeniya Sergeevna Naumenko Deputy Head of the Department of Corporate Control in the Department for Property Management and Corporate Relations of OJSC Gazprom. Svetlana Vladimirovna Antonova Deputy General Director for Legal Issues, OJSC Mosenergo 84 85 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 6/01) approved by the Ordinance of the Ministry of Finance, dated March 30, 2001 No.26n. Fixed assets shall be used in accounting II. Major Aspects of the Accounting Policy according to the established procedure and from the moment of commissioning of real estate assets, which shall be accounted for as part of the fixed assets group only after the transfer of documents for the state registration of title. The Company's accounting report has been prepared on the basis of the following accounting policies. Revaluation 1. Basis for Preparation Revaluation of fixed assets is carried according to the procedure established in the legislation, as well as according to the Financial statements are prepared under the current accounting and reporting rules of the Russian Federation, in particular, Federal corresponding instructions of the Director, in order to bring the value of fixed assets in balance with the current market value. The Law No. 129-FZ 'On Accounting', dated November 21, 1996; Provisions for Accounting and Reporting in the Russian Federation, results of the revaluation of fixed assets as of the first day of the reporting period are to be reported separately in the Balance Sheet. approved by Ordinance No. 34n, issued by the Russian Ministry of Finance on July 29, 1998, as well as other regulatory acts that The results of the revaluation are not included in the accounting statements of the previous reporting year and shall be reported at regulate the system of corporate accounting and reporting in the Russian Federation. the time of the preparation of the BalanceSheet as of the beginning of the reporting year.

The Company’s accounting policy was approved by the Company's Ordinance, dated December 22, 2008, No. 557. All major Fixed assets purchased before 2009 are reported in the Balance Sheet at the replacement asset value determined as of the date of aspects of this policy correspond to the Provision on Accounting Policy of OJSC Gazprom and its affiliates and organisations, revaluation on January 1, 2009 net of depreciation value. Fixed assets purchased after January 01, 2009 are recorded at their initial which was approved by Ordinance Number 347 of OJSC Gazprom, dated December 29, 2008. cost net of depreciation value accrued through their useful life.

Valuation of the property, liabilities and business transactions is denominated in roubles, the currency of the Russian Federation. Amortisation For fixed assets acquired before January 01, 2002 depreciation was accrued on the basis of standards approved by USSR Government The Company's assets and liabilities are valued in financial statements at the actual cost of their purchase. Except for: Resolution No. 1 072 dated October 22,1990, 'On Unified Norms of Amortisation Deductions for the Complete Restoration of Fixed Assets of USSR Economy'; and for fixed assets acquired after January 1, 2002 depreciation was accrued in accordance with norms - fixed assets; calculated on the basis of the useful life terms set by the Company. The classification of fixed assets included into depreciation groups approved by the Resolution No. 1 dated January 1, 2002 of the Russian Government, is used as one of the sources of the - financial investments which could determine current market value; information about the useful life of objects. The useful life periods adopted by the Company for consolidated groups of fixed assets are represented as follows: - assets with reserves for cost depreciation created according to the established procedures. Useful lives of objects on the Balance Sheet, (number of years) The Company does not prepare consolidated accounting reports and therefore, does not enforce the Accounting Provisions titled before January 01, 2002 from January 01, 2002 'Segment Information' (PSI 12/00). When preparing the reports, the Company also does not disclose the information on reportable segments. Buildings 55 or more years 20 or more years Facilities 8 to 50 years 5 to 30 years 2. Foreign Currency Denominated Assets and Liabilities Machines and equipment 10 to 30 years 2 to 30 years Business transactions denominated in a foreign currency (including those subject to payment in roubles) were carried out at Transport vehicles and other fixed assets 5 to 50 years 3 to 30 years the official rouble exchange rate established by the Central Bank of the Russian Federation effective as of the transaction date. Cash amounts in foreign currency and deposit accounts with banks, financial investments into short-term securities and the Community facilities 5 to 50 years 5 to 50 years float including issued and received foreign currency denominated loans were recognised in financial statements as calculated on Amortisation of fixed assets is accrued according to a straight-line method. the basis of official exchange rates as of December 31, 2009. As of this date, the exchange rates were: 30.2442 RUR for 1 USD (29.3804 RUR as of December 31, 2008); 43.3883 RUR for 1 Euro (41.4411 RUR as of December 31, 2008). No amortisation is accrued on the following: - land slots and environmental management sites; Currency rate fluctuations arising in revaluations of transactions with foreign currency denominated assets and liabilities subject - land improvements and other similar objects purchased before January 01, 2006; to payment in foreign currencies and roubles over the year (as well as of the reporting date) , are applied to the financial result as - housing facilities purchased before January 1, 2006 (except objects used for rendering of the corresponding services generating other revenues and expenses, and accounted in financial statements separately. income which is recorded as the result of regular operations or as part of other profits); - public community facilities; 3. Current and Non-Current Assets and Liabilities - fully amortised facilities which were not written off the Balance Sheet. Investments, accounts payable and receivable, including credit and loan liabilities are recognised in the Balance Sheet as current if their maturity (repayment period) does not exceed 12 months after the reporting date. Other assets and liabilities are shown as Lease non-current. Fixed assets accepted for use under lease agreements are reported as the off-balance items (in accordance with the agreement). The items of fixed assets acquired under long-term lease agreements are recorded as the off-balance items at the cost of lease If the requirements and liabilities are shown as non-current as of the beginning of the reporting period and there is a firm assurance payments. that accounts payable and receivable will be redeemed, then such long-term receivables will be classified as short-term receivables. Leased items of fixed assets with the exclusion of land lots are recorded as the off-balance items at the cost established in the lease 4. Intangible Assets net of VAT. Leased land lots and the lots obtained under indefinite use agreements are recorded according to their value in the land In the Balance Sheet, intangible assets are shown at their initial cost minus depreciation accumulated over the period of their useful life. registry. If the cost of the leased property is not entered into the lease agreement (including leases of operating facilities), then this Depreciation of intangible assets with a fixed term of useful life is calculated according to a straight-line method depending on the property is recorded as the off-balance sheet items at the value solely determined by the Company. term of useful life. Fixed assets on lease which are transferred for preservation, as well as the assets under going the state registration process are Amortisation of intangible assets with an indefinite term of useful life and assets purchased after January 01, 2008 is not accrued. recorded in the Appendix to the Balance Sheet at their net depreciated value. Similar assets purchased before January 01, 2008 shall have useful life of 20 years. Other 5. Fixed Assets Assets which do not comply with the requirements established for fixed assets and of the value not exceeding 20,000 roubles 86 Fixed assets include assets that comply with requirements of the Provision of Accounting titled 'Accounting of Fixed Assets' (RAS (inclusive) per asset are recorded as material and production inventories. The Company exercises control of the flow of such assets 87 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 in order to ensure their safety during production and operation. Inventories also include special tools, special appliances, special devices (special equipment), as well as a special work uniform irrespective of their useful life. The Company's Balance Sheet includes community facilities in the fixed assets group. These objects were acquired by the Company as a result of the privatisation of the Russian power industry without the ownership right transfer. These objects were The write-off of the value of special tools, special appliances and special equipment is carried out under a straight line method reported in accordance with the then effective procedure, namely creating a reserve of community facilities in the amount of the depending on the useful life of these items. depreciated book value of these objects. With the transfer of these objects to municipal authorities (and other types of retirement) their depreciated book value is recorded as the diminution of the social fund. Reporting of community facilities as fixed assets of The write-off of special work uniform with the useful life, in accordance with the norms of issue, exceeding 12 month is recorded the Company is a deviation from the existing rules although, according to the Company's management, this procedure ensures as expenses using a straight-line method depending on the useful life of special work uniform, special footwear and other means reliable information about of the Company's property as these objects are used in accordance with their designation and the of individual protection. Company is responsible for their integrity and safety. 9. Production Costs, Work in Progress and Output 6. Unfinished Construction Work in progress is valued at the actual production cost. Unfinished construction includes real estate objects finished in construction and accepted in operation, by which documents on registration of property rights in Uniform State Register are not transferred. The output is recorded in the Balance Sheet at the actual production cost, which includes expenses incurred in the production process due to the use of fixed assets, raw materials, fuel, power, labour and other production costs. Objects not requiring assembly but kept in the warehouse are recorded as the unfinished construction items. Business expenses include sales costs. Transport expenses included in the sales costs are written off in proportion tothe cost 7. Financial Investments (quantity) of goods minus the unsold goods. Financial investments are reported at their actual acquisition costs. 10. Deferred Expenditure Investments in securities listed on the stock exchange with the market value determined under the established procedure by the Deferred expenses incurred by the Company are to be written off evenly over the period to which they are attributable. The duration trade organiser are subject for revaluation at their current market value at the end of the reporting year. The difference between the of this period is determined as the moment the deferred expenses are reported in the balance. value of these securities at the current reporting date and their previous valuation will be recorded as other revenues and expenses. Software to be written-off as expenses in more than 12 months after the reporting date is recorded as an item of the non-current assets. Financial investments with indeterminable current market value are recognised in accounting books as of the end of the reporting period by their book value minus the reserve for the deviation between the book and estimated value that is to be set up for financial 11. Trade Receivables investments which show continuous and substantial depreciation. A review of financial investments for impairment is performed Trade receivables is determined on the basis of prices set in the agreements between the Company and buyers (customers) and once a year on December 31 of any reporting year following the stocktaking. When determining the reserve amount, the Company taking into account any available discounts (mark-ups) and the VAT. on the basis of available information determines the cost of financial investments with continuous depreciation and builds up a reserve for the impairment of financial investments for the for amount of the deviation between the book and estimated value. The Trade receivables not paid when due under agreements and not secured through relevant guarantees, pledges, and encumbrances total amount of the reserve is reported as the 'other expenses' item. or otherwise, are recorded net of accrued reserves for bad debts. The Company’s management considers these reserves as a conservative estimate of liabilities which are unlikely to be paid. The bad debt reserves are reported as other expenses. Securities (with the exception of individually identified, including bills of exchange and depository certificates), with indeterminable market value are reported in the Balance Sheet upon their retirement according to the FIFO method. Bad debts are written off the Balance Sheet once they are recognised as such; they are consequently recorded on the off-balance account within a 5-year period. Other financial investments, including individually identified securities with indeterminable market value (bills of exchange), are reported upon their retirement at the initial cost of each item. Profits and expenses from financial investments are recognised as 12. Cash Assets other profits and expenses. According to RAS 3/2006 titled 'Accounting of Assets and Liabilities Denominated in Foreign Currency', the information about the flow of foreign currency is calculated at the exchange rate of the Central Bank of the Russian Federation as of the date of accounting In accordance with RAS 3/2006 'Accounting of Assets and Liabilities Denominated in Foreign Currency' long-term securities statements when drafting a Cash Flow Statement. (except for shares)denominated in a foreign currency are revalued as of the date of the foreign currency transaction, as well as of the reporting date.. 13. Charter, Additional and Reserve Capital Charter capital is shown as the amount of ordinary shares purchased by their holders at par value. The amount of the charter capital 8. Inventories corresponds to the figure specified in the Company’s charter. Reported inventories are assessed at their actual acquisition costs. Inventories of materials with the market value lower than their actual acquisition cost as of the end of the year (due to continuous (long-term) decrease in price), as well as inventories materials According to the legislative provisions and the Article of Association of the Company, Mosenergo builds up a Reserve capital used in production of goods of the lower than actual production cost current market value as of the reporting date, are recorded in amounting to 5% of the charter capital. The amount of annual allocations to the Reserve fund is established according to the the accounting statements at their market value. resolution of the Shareholders’ General Meeting; this amount shall not be less than 5% of the Company’s net profit.

Valuation of inventories upon their retirement is carried out by the average cost method. The additional capital is made up of the additional value of fixed assets as determined by a revaluation, as well as a premium from sales of the Company’s shares at a price above their par value, received donations and the expended accumulation fund accrued Goods purchased by Mosenergo's subsidiaries are reported under the 'Goods' item in the accounting statements in the following as a result of commissioning of fixed assets financed from the profit generated by the Company. order: - in retail trade and catering branches – at retail (sale) prices; 14. Received Loans and Credit Facilities - in wholesale trade and other affiliates – at purchase price (acquisition price). Extra expenses incurred by the Company through attracting credit facilities and loans on the investment assets are included in the costs of the latter. Inventories also include items complying with the requirements for the inclusion of fixed assets with the acquisition cost not more than RUR 20,000 (inclusive) per item, as well as items (accessories and tools) that are not utilised immediately after their transfer Extra expenses incurred by the Company through attracting credit facilities and loans on the current assets are recorded as other 88 to the production, but within a period not exceeding 12 months and then are written off as a lump sum. costs while being used. 89 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 – the Company revalued its fixed assets following a valuation by an independent valuator; The results of this revaluation are Additional expenses incurred by the Company to attract credit facilities and loans on current assets that were partially used for reported in the Company's accounting statements as of January 1, 2009 (Balance Sheet, lines 120, 420 and 470); investment purposes, are included in the cost of such loans according to the corresponding ratio. – a change of the income tax rate from 24% to 20% (according to Russian legislation) resulted in a recalculation of the deferred Interest paid by the Company on the borrowed funds used for the financing of capital construction (including reconstruction and tax assets (deferred tax liabilities); the recalculation followed a deviation which appeared after the restatement of the account as modernisation) are included in the construction in progress section on the accrual basis. retained earnings (unsecured loss) of the previous years. The results of this revaluation are reported in the Company's accounting statements as of January 1, 2009 (Balance Sheet, lines 145, 515 and 470). Liabilities recorded in the financial statements as long-term and a with repayment date in the reporting period are reported in the short-term section. The adjustment of the Balance Sheet data is represented as follows (thous. of roubles): Line Code Amount before Adjusted amount Amount adjusted as of 15. Reserves for Deferred Expenses Business and Contingencies adjustment as of January 1 of 2009 The Company sets up reserves for deferred expenses on business contingencies. The amount of the established business December 31 2008 contingency reserve is reported under other expenses. Fixed assets 120 93,031,794 41,947,121 134,978,915 16. Deferred Taxes Deferred Tax Assets 145 8,278 (1,380) 6,898 The Company records differed taxes and liabilities, as well as standing tax assets and liabilities in the financial statements and TOTAL for Section I 190 113,605,788 41,945,741 155,551,529 accounting reports, i.e. amounts that could influence the amount of the current tax in the current and/or the following reporting Total for the asset 300 160,702,858 41,945,741 202,648,599 period. Added Capital 420 81,053,167 45,643,367 126,696,534 Retained Earnings 470 2,603,272 (5,235,715) (2,632,443) The amount of deferred tax assets and liabilities is recorded in the Balance Sheet in full detail as non-current assets (Line 145, (unsecured loss) 'Deferred Tax Assets') and in the long-term liabilities section (Line 515, 'Deferred Tax Liabilities'), respectively. TOTAL for Section III 490 123,232,590 40,407,652 163,640,242 The amount of tax overpayments to the profit tax budget is recorded in accordance with the requirements of RAS18/02; it is Deferred Tax Liabilities 515 1,324,023 1,538,089 2,862,112 recognised as deferred tax assets recorded in the Balance Sheet in Line 240, 'Accounts Receivable', as they present accounts TOTAL for Section IV 590 16,162,933 1,538,089 17,701,022 receivable and not deferred tax assets in the economic sense . Total for the liability 700 160,702,858 41,945,741 202,648,599

17. Recognition of Income The indicators as of January 1, 2009 are listed in the Annex to the Balance Sheet and in the Explanatory Note with the adjustments The revenue from sales of products and services is acknowledged, for the purposes of accounting, as the products are being explained in Section II of paragraph 19, 'Introductory and Comparative Data'. dispatched (or services being rendered) and after the settlement documents are forwarded to the buyers. This revenue is reported in the Profit and Loss Statement, net of the value-added tax, export duties, and other similar mandatory charges. The comparative data of the Income Statement (lines 020, column 4, 'The cost of sold goods, products, works and services', regarding accrued amortisation) for 2008 is calculated on the basis of a partial revaluation of fixed assets from 2002 to 2008. The Company recognises other revenue as follows: – income from equitable capital in other organisations (including dividends); III. Disclosure of Significant Reporting Indicators – income from sales of fixed assets and other assets (excluding cash and foreign currency), as well as products and goods; – interest on the Company's cash assets received from a bank managing the Company's account; 1. Fixed Assets – interest received on the bills of exchange of third parties, in accordance with the interest covenant in the bill of exchange upon its presentation for the payment. Revaluation As of January 1, 2008 the Company used services of an independent valuator to revaluate three classes of fixed assets, namely: 18. Change of Accounting Policies – Substations, automated transformers, transformers, switchers, over-voltage limiters, disconnect switches, arresters, reactors, Changes in the Company's accounting policy in 2009 synchronous compensators, high-frequency rejecters, the equipment of outdoor switchgear, RUSN (Balance-on Plant Switchgear), In 2009 the Company enforced the following regulatory acts regarding accounting practices: OUT and others; – RAS 1/2008 , 'Organisational Accounting Policy'; – Pumps, compressors, ventilation equipment, electric motors, equipment of make up deminiralisers and fuel supply and diesel – RAS 2/2008, 'Accounting of Construction Contracts', generators; – RAS 15/2008, 'Accounting of Credit Facilities and Loans', – Constructing machines, lifting mechanisms, and specialised transport. – RAS 21/2008, 'Changes of Accounting Estimates'. As of January 1, 2009 the Company used services of an independent valuator to revaluate and report all classes of fixed assets. As of the date of the accounting statements, the Company cannot estimate the quantitative effect of transfer to the new Provisions on Accounting. The Company believes that the effect of the new RAS will result in insignificant changes related to comparative Lease values of 2008 in the accounting statements for 2009. In 2009 the value of fixed assets which the Company had on long-term lease amounted to 387,969 thousand roubles (81,431 thousand roubles in 2008). In 2008 and 2009 the Company had no transactions regarding the buying out of property due to the Changes in the Company's accounting policy for 2010 expiration of lease agreements. As a result of the abolition of Chapter 24, 'Single Social Tax', of the Taxation Code, the Company amended accounting plans with corresponding sub accounts. These sub accounts were created to report insurance premiums to the Social Insurance Fund of the The Company has outstanding (until the contract expiry) obligations to pay lease under the lease agreement; the amount of lease RF and the Pension Fund, as well as to the Federal and Regional Funds of Compulsory Medical Insurance. payments totals 901,542 thousand roubles, including:

19. Introductory and Comparative Data – 405,989 thousand roubles paid in 2009; Several indicators of column 3, 'As of the start of the reporting period', of the Balance Sheet are calculated through adjustment of – 350,556 thousand roubles to be paid in 2010. the Balance Sheet as of December 31, 2008. This adjustment was required due to the following factors: 90 As of 31.12.2009, land slots with the total area of 990.6 Ha are recorded in Line 910 'Fixed Assets on Lease' of the statement about 91 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 values on the off-balance accounts. This line also includes the price of the leased slots, which amounts to 42,308,340 thousand As of December 31, 2008 As of December 31, 2009 roubles. As of 31.12.2008, the Company holds on lease land slots with the total area of 1,169.9 Ha that are not recorded in value Key Operations Book value, Reserves Proceeds Retired / Book value, Reserves Share, % terms on the off-balance accounts. including allocated for including reserves the reserve reserves Fixed assets leased by the Company are listed in the Annex to the Balance Sheet as depreciated costs. Financial investments which do not require a current market value evaluation Investments in 52,249 (5) 100 997 51,352 (1,002) - Pledges subsidiaries The Company pledged fixed assets to ensure performance under loan agreements at the following values (thous, roubles): OJSC 'TEK Mosenergo' Contracted 50,000 - - - 50,000 - 100 As of January 1, 2009 As of December 31, 2009 construction Pledged value 5,424,882 - CJSC Energoinvest-ME Broker services 2,249 - - 997 1,252 (997) 90 Book value for the reporting date 6,899,057 - CJSC Energokonsalt Consulting and - (5) - - - (5) 100 project services In Annex to the Balance Sheet pledged fixed assets are recorded at their depreciable value. CRMP, ltd. Repairs of power - - 100 - 100 - 100 equipment Registration of Ownership Rights Investments in affiliates 2,233 - - - 2,233 - - Book value of fixed assets subject to obligatory state registration (thous., roubles): OJSC Shatura Association Peat mining 1,713 - - - 1,713 - 33.99 As of January 1, 2009 As of December 31, 2009 for Peat Mining Fixed assets with registered ownership 66,323,216 68,929,369 SEBA ENERGO, ltd. Development, 520 - - - 520 - 44 Fixed assets without registered ownership 11,211,831 11,055,922 manufacturing Total 77,535,047 79,985,291 of instruments Other investments 28,470 (441) 470 23,905 5,035 (441) - As of December 31, 2009 fixed assets without registered ownership include commissioned facilities, as well as facilities CJSC IK Investment 3,000 - - - 3,000 - 12 undergoing the registration for the total amount of 7,234,354 thousand roubles (7,200,347 thousand roubles as of January 1, ENERGOGARANT- activities, Broker 2009). Other unregistered fixed assets were acquired by the Company free of charge from 1992 to 1997 (and earlier). These INVEST, ltd. services assets include 154.9 km of heating networks valued at 3,321,155 thousand roubles (2,434,809 thousand roubles as of January 1, OJSC SAK Insurance 1,565 - 470 - 2,035 - 0.18 2009). The Company is following an established procedure to register ownership rights for such properties, which were received ENERGOGARANT through an assignment during the reorganisation. CJSC MOSKON Waste recycling - (200) - - - (200) 20 CJSC Telecomenergo Telecom- - (150) - - - (150) 15 Community Facilities munications As of December 31, 2009, the total value of community facilities amount to 140,111 thousand roubles (368,992 thousand roubles as of January 1, 2009). In 2009 the Company transferred several communal facilities to the municipal authorities. The book CJSC Khoroshevskaya Construction - (91) - - - (91) 16.1 value of the facilities transferred in 2009 amounted to 226,833 thousand roubles. The Company is planning to continue these Power Company of combined operations in 2010. We expect a significant transfer of public community facilities in 2010. cycle CTPP CB TIB Banking 23,905 - - 23,905 - - - 2. Unfinished Construction Bills of exchange 9,378 - - - 9,378 - - Line 130 of the Balance Sheet, 'Unfinished Construction', includes (thous., roubles): Ulyanovskenergo 9,378 - - - 9,378 - - bills of exchange As of December 31 2008 As of December 31 of 2009 Financial investments which require a current market value evaluation Unfinished Construction 18,735,154 14,630,742 Other investments including built and operational real estate for which 150,819 150,819 OJSC RusHydro electricity 27,181 - 24,152 - 51,333 - 0.02 the property registration documents were not generation transferred to the Uniform State Register. Total 119,511 (446) 24,722 24,902 119,331 (1,443) - Equipment in installation 1,491,278 1,846,806 Total 20,226,432 16,477,548 On December 25, 2008, the Company’s BoD made a decision (Minutes No.10) about the termination of its participation as a founder in OJSC CB Transinvestbank. During 2009, the bank paid to the Company the actual value of its share determined under the law.

3. Long-Term Financial Investments As of December 31, 2008 and December 31, 2009, long-term investments were not encumbered. Details on financial investments under Line 140 of the Balance Sheet, 'Long-Term Financial Investments' are as follows (thous., roubles):

92 93 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 Depreciation Reserve 7. Accounts Receivable Long-Term Receivables Long-term investments characterise by a steady value depreciation are reported in the Company's Balance Sheet after the deduction Breakdown of Accounts Receivable by Line 230, 'Accounts receivable (due in more than 12 months after the reporting date)', is of the accrued depreciation reserve. represented in the following way: As of December 31, 2008 As of December 31, 2009 The flow of the reserve by the long-term investment class (thous., roubles): Advances paid 4,020,277 4,279,325 As of December 31, 2008 Allocated Used As of December 31, 2009 Advances for capital construction 4,020,277 4,279,325 Investments in subsidiaries 5 997 - 1,002 Other debtors 87,940 31,775 Other investments 441 - - 441 Housing loans to the Company's staff 50,618 596 Total 446 997 1,443 Other 37,322 31,179 Total 4,108, 217 4,311,100 4. Inventories The inventories are represented in the Balance Sheet as follows (thous. of roubles): Other long-term receivables are reported net of the reserves for bad debts, given below. As of December 31, 2008 As of December 31, 2009 The accrual of the reserve for bad debts is a deviation from the established rules of accounting and reporting, set by paragraph 70 Fuel 2,854,113 2,767,923 of the Provisions on Accounting in the Russian Federation, approved by the Ordinance of the Ministry of Finance of the RF, dated Spare parts 303,500 762,646 July 29, 1998, No.34n in accordance with which the Company is entitled to build up reserves for bad debts for the settlements with Construction supplies 230,963 388,492 other entities and physical bodies for products, goods and services. The Company’s management believes that this deviation from Other materials 934,755 577,552 the rules allows a fair representation of the property status and financial results of the Company operations. Total 4,323,331 4,496,613 Short-Term Receivables As for December 31, 2009 and December 31, 2008, the Company did not set up a reserve for the reduction in the cost of materials Breakdown of Accounts Receivable by Line 240, 'Accounts receivable (due in more than 12 months after the reporting date)', is since the major volume of inventories stored on these dates was emergency supplies. represented in the following way (thous., roubles): As of December 31, 2008 As of December 31, 2009 As of December 31, 2008 and December 31, 2009, the Company has no pledged inventories. Buyers and customers 7,261,375 14,368,127 5. Deferred Expenditure Advances paid 12,337,057 15,182,609 The Balance Sheet contains the following deferred expenses (thous., roubles): Advances for capital construction 7,806,506 10,768,934 As of December 31, 2008 As of December 31, 2009 Advances to suppliers and contractors 4,530,551 4,413,675 Long-term Short-term Long-term Short-term Other debtors 1,253,558 2,423,734 Purchase of software 219,658 52,789 413,449 109,894 Overpayment of tax 239,694 276,406 Life, property and liability insurance - 39,542 - 6,640 Interest on the loan extended to CJSC Gazenergoprom-Invest 694,954 1,723,980 Staff training - 25 636 - 23,373 Other 318,910 423,348 Deferred vacation payments - 8,521 - 7,626 Total 20,851,990 31,974,470 Acquisition of various licenses - 194 - 112 Trade receivables and other debtors is reported net of the bad debt reserve given below. Other - 9,427 - 65,353 Total 219,658 136,109 413,449 212,998 The accrual of the reserve for other bad debts is a deviation from the established rules of accounting and reporting, set by The deferred expenses which have to be written-off within 12 months after the reportingdate are recorded in Line 150 'Other Non- paragraph 70 of the Provisions on Accounting in the Russian Federation, approved by the Ordinance of the Ministry of Finance of Current Assets' in the Balance Sheet. the RF, dated July 29, 1998, No.34n in accordance with which the Company is entitled to build up reserves for bad debts for the settlements with other entities and physical bodies for products, goods and services. The Company’s management believes that 6. Value-Added tax on Purchased Valuables this deviation from the rules allows a fair representation of the property status and financial results of the Company operations. Line 220 of the Balance Sheet, 'Value Added Tax on Acquired Tangible Assets', includes the amount of the value added tax of RUR 1,195,816 thousand as of 31/12/2009 (938,790thousand roubles as of December 31, 2008). Bad debt reserves The flow of the bad debt reserve by debt class (thous., roubles): Tax on own construction attributable to goods (works, services) acquired by the Company for the construction and assembling As of December Allocated Used Restored As of December operations, as well as the amount of tax in respect of the acquisition of fixed assets and capital construction in progress totals 31, 2008 31, 2008 1,093,490 thousand roubles as of December 31, 2009 (881,419 thousand roubles as of December 31, 2008). This amount includes Reserves accrued for long-term receivables 195,305 thousand roubles as of December 31, 2009 (202,490 thousand roubles as of December 31, 2008) on the construction of facilities that starter before January 1, 2006 and that are not yet commissioned. Other Receivables - 31,179 - - 31,179 Reserves accrued for short-term receivables Buyers and customers 1,531,154 1,380,185 (4,850)(1,594,742) 1,311,747 Other Receivables 190,062 242,569 (413) (191,928) 240,290 Total 1,721,216 1,653,933 (5,263) (1,786,670) 1,583,216

94 95 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 8. Current Financial Investments Added Capital Details on financial investments under Line 250 of the Balance Sheet, 'Short-Term Financial Investments' are as follows (thous., As of December 31, 2009, additional capital amounted to 126,283,308 thousand roubles (126,696,534 thousand roubles as of roubles): January 1, 2009); the capital is represented as follows: As of December Appeared Paid As of December As of January 1, 2009 As of December 31, 2009 31, 2008 31, 2009 Increase in the value of fixed assets 72,530,108 72,116,882 Financial investments which do not require a current market value evaluation Share premium 49,220,000 49,220,000 Extended loans 13,375,000 - 606,125 12,768,875 Other 4,946,426 4,946,426 Bills of exchange 68,600 - 68,600 - Total 126,696,534 126,283,308 Deposits - 5,001,000 5,001,000 - The decrease in additional capital by 413,226 thousand roubles in 2009 happened due to the disposal of fixed assets and the Acquired claims transfer of the increased amount to the Company's retained earnings. Acquired claims 40,712 - - 40,712 Reserve Capital Total 13,484,312 5,001,000 5,675,725 12,809,587 The Company's Charter envisages creation of the Reserve fund in the amount of 5% from the charter capital of the Company. The reserve for depreciation of short-term investments was not created due to the lack of evidence of their continuous depreciation. According to the decision of the General Meeting of Shareholders of OJSC Mosenergo, dated June 1, 2009, net profit of the Company in 2008 amounting to 68,586 thousand roubles was allocated to the reserve fund (36,974 thousand roubles in 2007). As As of December 31, 2008 and December 31, 2009, long-term investments were not encumbered. of December 31, 2009 the amount of the reserve fund reached 794,181 thousand roubles or 2.00% (725,595 thousand roubles or 1.83% as od December 31, 2008) of the charter stock. 9. Sundry current assets As of the end of the reporting period, Line 270, 'Other current assets', records the VAT amount for the advances received for 11. Fixed Liabilities the forthcoming supply of goods (work, services) and not settled as 291,929 thousand roubles as of 31.12.2008 (RUR 214,286 As of December 31, 2008, Line 520 of the Balance Sheet, 'Other long-term liabilities' amounts to 95,000 thousand roubles and thousand as of December 31, 2008). represents liabilities secured by the Company's own bills of exchange with the maturity date 12 months after the reporting date. As of December 31, 2009, all liabilities secured by bills of exchange was reclassified as short-term liabilities and reported in Line 10. Capital and Reserves 625, 'Other debtors' of the Balance Sheet. Registered Capital As of December 31, 2009, the number of common shares was 39,749,359,700 (39,749,359,700 shares as of December 31, 2007) 12. Loans and Credit Facilities at the nominal value 1 rouble each. All issued ordinary shares have been completely paid except for the Company's shares bought Credit facilities back from shareholders. The Company's credit facilities are represented as follows (thous. of roubles): Redemption period As of December 31, 2008 As of December 31, 2009 As of December 31, 2009, the Company allocated its common stock as follows: Long-term loans 5,331,667 3,287,732 Number of shares Par value thous., roubles EBRD 2012 2,866,667 - Legal entities 38,074,281,642 38,074,282 EBRD 2018 2,465,000 - Gazprom Power Holding, ltd. 21,265,104,840 21,265,105 CALYON Deutschland 2025 - 133,649 Property Department of the Government of Moscow 10,512,012,316 10,512,012 CALYON Deutschland 2014 - 1,083,948 Legal entities and nominee shareholders 6,297,164,486 6,297,165 BNP Paribas 2023 - 2,070,135 Individuals 1,534,848,607 1,534,849 Short-term loans (including the short-term part of long-term 7,966,999 3,468 On Mosenergo's bankbook 140,229,451 140,229 loans) Total 39,749,359,700 39,749,360 EBRD 2009 1,440,453 - Equity bought back from shareholders Bank of Moscow 2009 2,300,000 - The Company's own shares bought back from the shareholders represent the value of the shares owned by the Company. As of CJSC International Industrial Bank 2009 2,976,000 - December 31, 2009 the Company owned 140,229,451 shares for the amount of 870,825 thousand roubles (163,904,251 shares Sberbank of Russia 2009 1,250,546 - amounting to 898,804 thousand roubles as of December 31, 2008). The changes is due to the sales of 23,674,800 shares for CALYON Deutschland 2010 - 3,468 34,450 thousand roubles; the acquisition cost amounted to 27,979 thousand roubles. Accounts payable on received loans and credit facilities are reported and shown in the financial statements including all accrued Dividends interests as of the end of the reporting period. In may 2008, following the results of the General Meeting of the BoD of OJSC Mosenergo, the Company decided not to pay dividends on common stock for 2007. In 2009, the Company received loans amounting to 8,767,672 thousand roubles; accrued interest on loans totalled 1,616,655 thousand roubles. The total amount of loans paid in 2009 reached 18,711,271 thousand roubles, including the early repayment (in In June 2009, following the results of the General Meeting of the BoD of OJSC Mosenergo, the Company decided not to pay December 2009) of the EBRD loan; the amount of interest on loans totalled 1,702,252 thousand roubles. dividends on common stock for 2008.

96 97 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 The consolidated effect from the recalculation of transactions on loans denominated in foreign currencies amounted to 21,730 3 200 Standing tax liabilities (assets), (line 4-6), icluding: 1,062,323 314,823 thousand roubles. Additional expenses related to loans amounted to 1,314,016 thousand roubles in 2009 (19,440 thousand roubles 4 Standing tax liabilities (line 5x20% for 1,467,191 1,017,188 in 2008). 2009, line 5x24% for 2008) 5 Standing variations taking into account 7,335,954 4,238,283 Interest rates on long-term loans in 2009 ranged from 2.74% to 24.5% (from 7.58% to 24.5% in 2008). Interest rates on short-term taxable profits, including: loans in 2009 ranged from 13.7% to 18.0% (from 6.62% to 18.00% in 2008). including expenses for social benefits 940,267 1,625,614 As of December 31, 2008 and December 31, 2009, the Company had no overdue loans. including variations related to the depreciation 5,032,055 1,366,652 losses not accepted for tax assessment 715,665 660,763 Loans including assets exceeding legislative norms 208,870 210,726 The Company's loans are represented as follows (thous. of roubles): including expenses not related to regular operations 730,696 206,951 Redemption period As of December 31, 2008 As of December 31, 2009 variations in reserves under regular and tax accounting (394,869) 112,049 Long-term loans 9,412,243 14,412,243 other variations which increase taxable profit 103,270 55,528 Bond loans (series 02) 2016 4,782,914 4 ,782,914 6 Standing tax assets ((lines 7.1+7.2)x20% (404,868) (702,365) Bond loans (series 01) 2011 4,629,329 4,629,329 for 2009, line 7x24% for 2008)) Bond loans (series 03) 2014 - 5,000,000 7 Standing variations taking into account (1,742,056) (2,926,521) Short-term loans taxable profits, including: 7.1 profits not accepted for tax assessment (195,053) (247,205) (including the short-term part of long-term loans) 226,699 2,412,923 7.2 variations in reserves under regular and tax accounting (135,605) (58,300) Bond loans (series 02) - 125,322 126,324 7.3 variations on profits/losses reported in revised declarations (1,411,398) (2,621,016) Bond loans (series 01) - 101,377 169,640 8 141 Bond loans (series 03) - - 37,911 Deferred Tax Assets 13,722 7,465 (line 9x20% for 2009, line 9x24% for 2008) Stock bonds 2010 - 2,079,048 9 temporary deducted variations, including: 68,610 31,102 In 2009 the Company received a long-term bond loan amounting to 5,000,000 thousand roubles; accrued interest on loans totalled 899,286 thousand roubles; paid interest on loans reached 713,062 thousand roubles. losses from the assignment of right of demand (28,559) 28,559 of the debt after the repayment date Additional expenses related to receiving loans amounted to 39,139 thousand roubles in 2009 (0 thousand roubles in 2008). other deferred expenses 14,296 2,763 loss from sales of amortised property 82,873 (220) Interest rates on loans in 2009 ranged from 7.54% to 12.50% (from 7.54% to 7.65% in 2008). 10 142 Deferred Tax Liabilities (1,284,028) (285,999) As of December 31, 2008 and December 31, 2009, the Company had no overdue loans. (line 11x20% for 2009, line 11x24% for 2008) 11 Temporary tax deducted variations, including: (6,420,140) (1,191,661) 13. Payables variations in fixed assets amortisation (6,543,890) (1,702,690) Details on payables under Line 625 of the Balance Sheet, 'Other debtors' are as follows (thous., roubles): variations in indirect expenses (11,203) (1,345) As of December 31, 2008 As of December 31, 2009 variations in the bad debts reserve in 139,426 319,687 Advances received 1,473,355 2,129,550 tax and general accounting Other claimholders 1,108,232 1,832,605 other taxable variations (5,428) 189,932 VAT on advances paid - 656,256 licensing expenses, software purchase expenses 955 2,755 Liabilities to the Property Department of Moscow on 523,461 523,461 12 Taxable base for the income tax 6,215,956 2,371,277 funds received for the shared construction (line 1 +line5 -line 7 +line 9 -line 11) Civil liabilities on writs of execution 498,014 498,014 13 Income tax (1,183,963) (569,106) Liabilities secured by the Company's own bills of exchange 57,000 95,000 (line 2 +line 2.1 +line 3 +line8 - line 10), including: Other 29,757 59,874 145 Current income tax (1,520,432) (1,198,150) Total 2,581,587 3,962,155 146 Income tax for previous years 338,736 629,044 Taxes on dividends deducted from the source of payment (2,267) - 14. Taxes 14 Other expenses from profit (10,329) (708) Pursuant to the Provisions on accounting, ‘Income Tax Accounting', (Russian Accounting Standards, or RAS 18/02), the Company 15 190 Net Profit (loss) for the reporting period 4,508,990 1,371,721 recorded in the Balance Sheet, as well as in the Income Statement the following indicators for 2009 (thous., roubles): (line 1 -line 13 -line 14 +line 8 -line 10) No. Line number of the Line/Indicator Name for 2009 in 2008 Income Statement 15. Other Current Liabilities 1 140 Revenue (loss) before Tax 6,973,588 2,220,069 As of December 31, 2009, liabilities in Line 660, 'Other current liabilities' of the Balance Sheet amount to 6,839 thousand roubles 1.1 including revenues from equities in other organisations 25,194 - (RUR 118,888 thousand as of December 31, 2008). The variation of current liabilities in the reporting period amounted to 112,049 2 Contingent expenses (contingent gains) on the income 1,389,679 532,817 thousand roubles. It happened due to the use of the reserve (in this reporting period) set up in the previous periods following the tax ((lines 1-1.1)x20% for 2009, line 1x20% for 2008)) suit of OJSC MTK regarding the recovery of interest accrued for the use of external funding, as well as due to untimely payments 2.1 Taxes on dividends deducted from the 2,267 - under the agreement on providing heat transmission services and the heat transfer medium. 98 source of payment (line 1.1x9%) 99 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 16. Operating Expenses For 2009 For 2008 The cost of sold goods, products, works and services (the total of lines 020, 030, 040 of the blank (form) No. 2) correlates with Net profit (undistributed) for the reporting year, thous., roubles 4,508,990 1,371,721 the total amount of expenses recorded in Line 760 of Section titled 'Operating Expenses' of Blank (form) 5, 'Annex to the Balance Weighted number of the Company's own outstanding shares in the reporting year 39,609,130,249 39,640,219,504 Sheet', as stated in the corresponding section of Form 5. Basic Earnings per Share 0.1138 0.0346 17. Other gains and expenses Details on Line 90, 'Other Expenses' and on Line 100, 'Other Expenses' of the Income Statement of the Company are given as In 2009, the Company did not have an additional issue of common shares. The Company also did not have securities that had to be follow (thous., roubles): converted into an additional number of common shares, according to the issue requirements. The Company had no events related for 2009 for 2008 to an increase in the number of common shares. Therefore, the Company did not calculate the diluted earnings per share. Profits Expenses Profits Expenses 19. Affiliated Parties Sales of fixed assets and commodities and materials 3,401,926 1,343,976 103,937 91,373 As of December 31, 2008, the Company was controlled by OJSC Gazprom, which owns 53.47% of the Company's common stock. Changes in valuation reserves 1,786,670 1,654,930 1,971,937 2,477,410 The other 46.53% of the common stock is distributed among a large number of shareholders, including a small share owned by the Financial investment flow, including third- 1,041,366 92,505 15,408,120 15,408,120 city of Moscow (represented by the Property Department of Moscow): 21.16% of the common stock. party bills of exchanges Other revenues and expenses detailed in the Details 436,567 361,802 453,710 938,419 In April 2009, OJSC Gazprom transferred its share of 53.47% of the Company to its 100%-owned subsidiary, Gazprom Energoholding, of Revenues and Expenses of the Income Statement ltd. As of December 31, 2009 the Company is controlled by OJSC Gazprom Energoholding and is part of the Gazprom Group, which (except for changes in valuation reserves) includes OJSC Gazprom and its subsidiaries. Subsidies for losses related to thermal power 378,179 - 324,268 - In 2009, other affiliated parties of the Company were members of the BoD, members of the Executive Board and the following legal Sales of accounts receivable 281,608 303,081 548,597 606,060 entities: Revenues and expenses resulting from emergency situations 64,802 21,110 259,087 211,583 Organisational and Legal Form, Organisation Name Type of Affiliation (control or significant influence) Revenues and expenses incurred under the agreement 34,450 28,127 - 254 on fiduciary management of securities CJSC Energoinvest-ME OJSC Mosenergo has the right to control more than 20% of the voting stock (equity, shares) making Revenues from the revaluation of securities 24,621 - - - up the charter capital stock of the entity Sale and purchase of foreign currency 11,645 3,832 155 52,964 CJSC Energo-konsalt OJSC Mosenergo has the right to control more than Expenses related to borrowing - 1,314,016 - 19,440 20% of the voting stock (equity, shares) making Expenses related to social benefits - 495,739 - 1,087,176 up the charter capital stock of the entity Services of the Technical Information Bureau - 178,342 - 742 Seba-Energo Russian-German Joint Venture, ltd. OJSC Mosenergo has the right to control more than Redundancy compensations paid to employees - 126,963 - 291,414 20% of the voting stock (equity, shares) making Legal and consulting services - 86,385 99,806 up the charter capital stock of the entity Compensation for the out-of-service time - 80,437 - OJSC Shatura Association for Peat Mining OJSC Mosenergo has the right to control more than due to the employer's fault 20% of the voting stock (equity, shares) making VAT for the account of profits - 68,428 - 84,957 up the charter capital stock of the entity Expenses for production which resulted in no output - 64,999 - - OJSC 'TEK Mosenergo' OJSC Mosenergo has the right to control more than 20% of the voting stock (equity, shares) making Banking services - 61,958 - 156,387 up the charter capital stock of the entity Disposal of unprofitable assets 51,307 59,505 The Central Repairs and Mechanical Plant, ltd. OJSC Mosenergo has the right to control more than Other taxes - 25,467 - 45,036 20% of the voting stock (equity, shares) making Sponsorship, charity expenses - 4,581 - 16,348 up the charter capital stock of the entity Equipment dismounting expenses - 1,894 - 40,865 Leasinginvest-ME, ltd. The entity belongs to a group of entities, Other 33,210 193,186 43,976 203,542 which include OJSC Mosenergo Total 7,495,044 6,563,065 19,113,787 21,891,401 Joint Stock Company Topenergy The entity belongs to a group of entities, which include OJSC Mosenergo As of December 31, 2009 and December 31, 2008, revenues and expenses related to the build-up of a bad debt reserve are recorded in the Company's statements in a detailed manner and for the amount if the reversed reserve, which was accrued in the Sales of products to affiliated parties were carried out according to standard business procedures and at market prices with the previous reporting period and remained unused as of the end of the reporting period. exclusion of prices for goods and services subject to tariff regulations.

18. Earnings per Share Sales of heat are carried out by Mosenergo at prices not exceeding the regulated tariffs (their threshold values), if available, as well Basic earnings per share is calculated as a ratio of the basic profit for the reporting period to the weighted number of common stock in as in accordance with the Wholesale MarketRegulations and the Ordinance of the Government of the RF, No.109, 'On Pricing of circulation during the reporting year. Basic earnings equals to the net profit of the reporting year (line 190 of the Income Statement). Electricity and Heat in the Russian Federation', dated 26.02.2004,.

When allocating the weighted number of common stock in circulation, the Company registered its shares acquired under the In 2009, the amount of electricity sold by OJSC Mosenergo on the 'the next day market' and on the 'balancing market' reached fiduciary management agreement; the Company did not register its shares bought back from the shareholders as a result of the 15,775,226 thousand roubles; the amount of capacity reached 11,636,486 thousand roubles (12,671,649 thousand roubles and merge with OJSC Mosenergo Holding and registered on the Company's bank book as of December 31, 2009 and December 31, 2008. 3,339,172 thousand roubles sold in 2008, respectively). The major share of these sales was carried out at prices determined

100 101 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 through a competitive selection of price bids of customers and suppliers in accordance with the Ordinance of the RF Government The information about the revenue and the cost of rendered products, works and services are listed net of VAT, excises and export duties. No. 643, 'On Regulations of the Wholesale Market of Electricity in the Transitional Period', dated 24.10.2003. Loans issued to affiliated parties (thous., roubles): Purchases of products from affiliated parties were carried out according to standard business procedures and at market prices with 2009 2008 the exclusion of prices for goods and services subject to tariff regulations. Liabilities as of January 1 13,375,000 - In the reporting period, the Company did not carry out non-cash mutual settlements with affiliated parties. Issued in the reporting year - 13,375,000 Paid in the reporting year 606,125 - Services regarding the supply of thermal energy were purchased from OJSC Moscow Heating Network Company in accordance Liabilities as of December 31 12,768,875 13,375,000 with the tariffs approved by the Ordinance of REK of the City of Moscow No.87, dated 19.12.2007 and the Minutes No.17 of TEK of the Moscow Region, dated 26.12.2007. The above-stated loan is granted to CJSC Gazenergoprom-Invest” at 8.3% interest p.a.

Transactions with affiliated parties of OJSC Gazprom The loan maturity date set in the agreement is December 31, 2008. The Company expects that the above-stated loan will be repayed In the reporting year, the Company rendered services on lease of property, communication services, as well as sold bills of in 2010. exchange to the following organisations of OJSC Gazprom: Sales profit As of December 31, 2009, liabilities of the Company on the settlements with affiliated parties of OJSC Gazprom amounted to (thous., roubles): For 2009 For 2008 OJSC Gazprombank 208,221 168,139 Accounts Receivable Payables OJSC 'Gazprom' 20,604 15,133 As of December 31, As of December 31, As of December 31, As of December 31, OJSC 'TGK-1' 7,981 2,879 2009 2008 2009 2008 CJSC Gazpromenergobank 6,919 - Mosregiongas, ltd. 3,954,305 3,872,926 2,504 375,545 OJSC Stroytransgaz 5,448 3,816 CJSC Gazenergoprom Invest 1,723,980 - - - OJSC 'WGC-2' 4,717 9,160 CJSC Gazprombank Leasing 605,749 327,255 48,112 - OJSC 'WGC-6' 4,180 742 OJSC Neftyanoy Dom 10,927 - 360 - OJSC Promgaz 1,556 1,195 OJSC 'TGK-1' 9,925 2,064 2,122 - OJSC Gazavtomatika 878 608 OJSC 'Gazprom' 4,952 - - - CJSC Gaztelecom 184 161 OJSC Gazenergoprombank 1,131 - - - OJSC AK Sibur 3 2,125 OJSC 'WGC-6' 471 471 - - Gazprom Transgaz, Moscow, ltd. - 339 OJSC Stroytransgaz 231 - 6 133,945 Gazflot, ltd. -38 OJSC NTV-PLUS 74 272 - - Total 260,691 204,335 OJSC Gazprombank 66 593 5,518 - In the reporting period, the following organisations of OJSC Gazprom rendered product (gas) supply services, as well as other OJSC 'SOGAZ' 43 - 7,482 - services to the Company (thous., roubles): OJSC Sibur Holding - - 8,132 - The cost of rendered products, works and services Gazprom Transgaz, Moscow, ltd. - 400 - - For 2009 For 2008 OJSC 'WGC-2' - 3,473 - - Mosregiongas, ltd. 49,978,200 44,470,779 CJSC 'SR-DRAGa' - - 2,950 - OJSC 'Sogaz' 507,568 351,567 Gazprommedservice, ltd. - - 2,539 - CJSC Gazpromenergobank 179,619 - OJSC Gazenergoset - - 93,263 - OJSC Gazprombank 91,609 - Other 71 - - - OJSC Neftyanoy Dom 62,789 - Total 6,311,925 4,207,454 172,988 509,490 OJSC Sibur Holding 21,335 - OJSC 'WGC-6' 2,925 - Operations with Other Affiliated Parties OJSC Gazenergoset Nefteprodukt 1,331 - In the reporting period the Company sold electricity and heat, as well as rendered services to other affiliated parties listed below OJSC 'Druzhba' 1,081 - (thous., roubles): OJSC Gazpromneft-Center - SELLER 394 - Sales profit OJSC NTV-PLUS 248 - For 2009 For 2008 Gazprommedservice, ltd. 15 - OJSC Thermal Power Company Mosenergo 177,693 10,723 OJSC Gazpromregiongaz - 45,709 CB Transinvestbank, ltd. 16 4,800 Total 50,847,114 44,868,055 Total 177,709 15,523

102 103 ОJSC «Mosenergo» OJSC «Mosenergo» Explanatory Note to Explanatory Note to Mosenergo Annual Accounting Statements for 2009 Mosenergo Annual Accounting Statements for 2009 In the reporting period the Company received products, works and services from the following other affiliated parties (thous., 20. Contingent Factors and Information about Business Operations roubles): Taxation The cost of received products, works and services The Russian tax, currency and customs legislation allows for dfferent interpretation and is subject to frequent changes. The Company's Management accepts that, regarding some transactions executed in the reporting period and the previous accounting For 2009 For 2008 periods, there is a possibility of disputes with controlling bodies which may lead to a change in the results of the Company's OJSC Thermal Power Company Mosenergo 7,615 - business operations. Pursuant to Paragraph 24 of the Provisions of Accounting, titled 'Contingent Factors of Business Operations', CB Transinvestbank, ltd. - 161,567 RFPS 8/01, detailed information about such transactions shall not be disclosed in the report. Recent events in the Russian Total 7,615 161,567 Federation give an indication that tax authorities might have a stricter position in interpretation of the legislation and the inspection of tax settlements; the authorities could also dispute operations and activities that were not subject for disputes earlier. As a result, significant additional tax amounts might be imposed in the form of penalties and surcharges. Furthermore, tax inspections might The information about the revenue and the cost of rendered products, works and services are listed net of VAT, excises and export duties. cover three calendar years of the activitiescarried out before the year of inspection. Under certain circumstances even earlier periods might be subject for inspection. As of December 31, 2009, liabilities of the Company on the settlements with other affiliated parties of the Company amounted to (thous., roubles): As of December 31, 2009, the Company completed all tax disputes which occurred in the previous reporting periods. In the second Accounts Receivable Payables half of 2009, tax authorities carried out an on-site tax inspection of the Company regarding the 2006 to 2009 taxation period. The Company has not yet received the inspection results, but we believe that the Company has no substantial unreported tax liabilities As of December 31, As of December 31, As of December 31, As of December 31, or unforeseen events which could have a significant negative influence on the Company's operations and financial position as of 2009 2008 2009 2008 the reporting date. OJSC 'TEK Mosenergo' 308,047 496,355 236,416 1,711,247 CB Transinvestbank, ltd. - - - 20 The Company's Management believes that the Company managed to interpret the corresponding legislative provisions correctly CJSC Energoinvest-ME - - - 545 and the Company's position in regard to taxation, currency and customs legislation will be stable as of December 31, 2009. Shaturtorf, ltd. - 5 - - Total 308,047 496,360 236,416 1,711,812 21. Issued Guarantees As of December 31, 2009, the Company issued guarantees to third parties under mortgage agreements for the total amount of Operations Regarding the Executive Personnel 296,165 thousand roubles (380,503 thousand roubles as of December 31, 2008). The Company's Management does not expect Major executive personnel of the Company includes: members of the Board of Directors, members of the Executive Board. A list any significant liabilities regarding these guarantees. of members of the Board of Directors and members of the Executive Board is presented in the Section 'General Information' of the Explanatory Note. 22. Judicial Proceedings and Out-of-Court Settlements As of December 31, 2009, the Company is a defendant in a number of insignificant arbitration suits, including those with tax Remuneration to Director General is to be approved by the Chairman of the Board of Directors of OJSC Mosenergo. authorities. The Management of the Company believes that the results of these processes will nothave a considerable effect on the Company’s financial position. Remuneration to the major executive personnel are classified as follows (thous., roubles): The exception is made for the following important lawsuits: For 2009 For 2008 As of December 31, As of December 31, 2009 2008 1. The Moscow Arbitration Court in the Ninth Arbitration Court and Court of Appeal of the Federal Arbitration Court in the Moscow District of the Supreme Arbitration Court of the Russian Federation is reviewing 26 lawsuits (undergoing different stages of the short–term remuneration (salaries, premiums 77,324 107,783 - 1,483 judicial procedure) of OJSC Mosenergosbyt to OJSC Mosenergo. These actions are filed for the for recovery of payments under and bonuses) the recourse procedure resulting from the Agreement on the Principles of Joint and Several Liability between the companies which remuneration related to the termination of a - 147,078 - - emerged during the reorganisation of OJSC Mosenergo as of December 19, 2008. The amount of the lawsuit totals 92,019 thousand labour agreement roubles. The possibility of satisfaction of claims of OJSC Mosenergosbyt is currently estimated as high (90%). The Company's Expenses related to retirement benefits - 22,104 - - Management is considering the creation of a reserve for these risks. Total 77,324 276,965 - 1,483 2. According to the Inspection Resolution, no. 23-D issued by the Moscow Regional Power Commission and dated July 24, The information in the Table is presented without accruals in the extra-budgetary funds. 2009, OJSC Mosenergo was declared guilty of a administrative violation regarding the overcharging of tariffs for heat supplied to consumers. These tariffs were set in the Ordinance No. 1112-PP, 'On the Approval of the Utility Prices, Rates and Tariffs for The majority of the Company employees are entitled for private retirement benefits after the termination of labour. The Company the Population in 2009'. The possibility of a court decision about imposing administrative penalties (fines) on the Company is pays contributions for its employees, including key executives, to the Private Pension Fund Gazfond and to the Private Pension considerate to be moderate (50%). The maximum possible value of fines under such a decision could reach 461 mn roubles. The Fund Elektroenergetika . Company's Management currently considers this to be the least likely event.

The total amount of contributions paid to the Private Pension Fund Gazfond in 2009 and 2008 totalled 1,280 thousand roubles and 3. The Department of the Federal Antimonopoly Service, Moscow instituted legal proceedings No. A7-43/2009 against OJSC 364,181 thousand roubles, respectively. Mosenergo regarding abuse of the leading position on the heat sales market. The violation concerns impingement of interests of PIK-Komfort, ltd., regarding the pricing procedure envisaged in legal acts. The possibility of a court decision about imposing The total amount of contributions paid to the Private Pension Fund Electroenergetika in 2009 and 2008 totalled 0 thousand roubles administrative penalties (fines) on the Company is considerate to be moderate (50%). The maximum possible value of fines under and 425,293 thousand roubles, respectively. such a decision could reach 1.8 mn roubles. The Company's Management currently considers this to be the least likely event.

104 105 ОJSC «Mosenergo» Explanatory Note to Mosenergo Annual Accounting Statements for 2009 23. Events after the Reporting Date Glossary Dividends In May or June of 2010, the General Meeting of Shareholders will approve the amount of annual dividends per share. The Company's ADR American Depository Receipt Board of Directors is scheduled to meet in April 2010 in order to consider the amount of dividends for 2009, which shall be to be APS Atomic Power Station recommended for the approval by the General Meeting of Shareholders. TPP Thermal Power Plant GTU Gas Turbine Plant Events after the Reporting Date HPS Hydroelectric Power Station According to 2H09 resolutions of the major shareholder of the Company and the Company's Board of Directors, OJSC Mosenergo CIS Corporate Information System is planning to sell several of its minor assets in 2010. These assets will be reported in Line 120, 'Fixed Assets'. of the Balance Sheet. Capacity Factor Total capacity load factor PF Performance Factor 24. Financial Crisis KPI Key Performance Indicator Starting from mid-2008, the Russian economy was influenced by the world's financial crisis. It resulted in a decrease of mutual MICEX Moscow Interbank Currency Exchange trust in investment and banking, MOEK Moscow Unified Energy Company MRSK Interregional Distribution Network Company The growth of credit, currency and price risks resulted in negative economic events, such as price hikes, the volatility of stocks, a drop in industrial output, an avalanche of defaults and bankruptcies. The Company's Management cannot foresee all economic IFRS International Financial Reporting Standards trends which could influence the Company's financial position and operating results. The Management believes that it takes all MEK Moscow Design Institute for Power Facilities measures needed for to support sustainable business growth of the Company in this market situation. MESR Mosenergospetsremont NP Non-profit partnership WGC Wholesale Generating Company Head of Company V.G. Yakovlev WMEC Wholesale Market of Electric Energy and Capacity UES Unified Energy System CCGT Combined Cycle Gas Turbine Chief Accountant S.A. Suraev ST Steam Turbine RAS Russian Accounting Standards RTS Russian Trading System (Stock Exchange) On this day 1 of march 2010 RTS Heat Distribution Networks BoD Board of Directors SO UES System Operator of the Unified Energy System t/e Thermal Energy TA, OS and EP Service for Technical Audit, Occupational Health and Safety and Environmental Protection RGC Regional Generating Company ME Mechanic Equipment TPP Combined Thermal Power Plant FAS Federal Antimonopoly Service FSC Federal Securities Commission FTS Federal Tariff Service FFMS Federal Financial Markets Service CDO Central Dispatch Office e/e Electric Energy

Measurement Units

Gcal – Gigacalorie, measurement of thermal capacity Gcal/ hour – Gagicalorie per hour, measurement of thermal power kW – kilovolt, measurement of voltage kWh – kilowatt per hour, measurement of electric energy MW – megawatt, measurement of electric capacity

106 107 Contact Details

Investor Relations Department:

Ekaterina Alekseevna Pavlova Head of the Department Phone: (495) 957-1-957 (ext. 37-67) [email protected]

Denis Sergeevich Voronchikhin Leading Expert Phone: (495) 957-1-957 (ext. 34-57) [email protected]

Contact details for individual shareholders:

Tatiana Fyodorovna Sivova Leading Specialist of the Corporate Governance Department Phone: (495) 957-1-957 (ext. 32-10)

Mosenergo's Website: www.mosenergo.ru

Postal Address:

119526, Moscow, Prospekt Vernandskogo, 101, building 3

Auditor's Details:

CJSC PriceWaterhouseCoopers Audit White Square Office Center 10 Butyrsky Val, Moscow, Russia, 125047 Phone: (495) 967-60-00 Fax: (495) 967-60-01 Website: www.pwc.com

Registrar Details:

CJSC 'SR-DRAGa' Moscow, Novocheryomushkinskaya st., 71/32 Phone: (495) 719-40-44, (495) 719-39-29, (495) 719-39-30 E-mail: [email protected] Website: www.draga.ru

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